Whether your submitted loan application for commercial loan will be approved or not, you can know it now by calculating the debt service coverage. Using this calculator, a debtor will be able to find out the amount of new monthly payments, total annual income as well as total monthly obligations.
New loan amount
The amount of the commercial loan.
Amortization in years
Duration of repayment in years.
Rate of interest charged annually on this commercial loan. This annual rate of interest is converted to monthly rate using the 1/12 multiplier.
New monthly payment
Amount paid monthly on this loan.
Annual verifiable net income
Net income earned annually as stated on IRS tax returns or any other verified income statement.
Annual depreciation expense
The amount by which the fair value of the assets were reduced during the year.
Other non-cash charges
Depletion, amortization and all other non-cash charges that reduces the value of your assets in one year.
Real estate mortgage
Expenses incurred to pay the monthly real estate mortgages.
Business line of credit
Expenses made for any available line of credit for business.
Total amount of monthly expenses to pay auto loans.
Total amount of monthly outflow to repay credit card loans.
Total amount of monthly expenses on other remaining loans.
Monthly debt payments eliminated
Amount that will not be paid off by the new loan as the monthly obligation is higher than the monthly payoff from the new loan.
Debt service coverage (DSC)
The DSC is calculated as total annual net cash income divided by total annual debt services. If you can manage a Debt Service Ratio (DSC) of at least 1.25, it is fair that you expect your loan application to be approved.