DSCR is net operating income divided by required debt payments.

Why does 1.25 matter?

It is a common lender planning line because it shows income covers debt payments with some room left over.

Can a business run below 1.25?

Yes, but the cash cushion is thinner and the business has less room for a weaker month.

Debt Service Coverage Ratio Calculator

See whether operating income covers debt payments with enough room, and how much more debt service your business can safely support.

IndustryUse this if none of the listed industries fit, or if you want a broad planning check first.Monthly net operating incomeIncome available to pay debt after normal operating expenses.Monthly debt paymentsLoan, lease, and required debt payments due each month.Target DSCRUse 1.25 if you want a common lender planning line.

Result

Current DSCR

1.6

Required NOI at target

$12,500

Supportable debt payment

$12,800

Debt payment headroom

$2,800

Planning guide

Compare your dscr to the planning range we use for general small business.

Benchmark range: 1.25 to 2Your result: 1.6

This planning range uses common lender-style coverage levels. Around 1.25 is often treated as the minimum workable line.

Source: NerdWallet, DSCR loan calculator guide (April 2026)

What this means

Debt coverage looks workable

Your DSCR is not below the planning range we use for general small business

At your current operating income and debt payments, your DSCR is 1.6. A common lender planning line is about 1.25.

To hit that line, you need about $12,500 in monthly operating income, or you need debt payments closer to $12,800.

Planning guide

Planning ranges used in this DSCR calculator

This calculator uses lender-style planning ranges rather than public industry benchmarks.

DSCR is mainly a debt affordability measure. The key line most owners care about is whether income still covers debt payments with real room left over.

IndustryUse this if none of the listed industries fit, or if you want a broad planning check first.

General small business

Use this if none of the listed industries fit, or if you want a broad planning check first.

Benchmark range: 1.25 to 2

This planning range uses common lender-style coverage levels. Around 1.25 is often treated as the minimum workable line.

Source: NerdWallet, DSCR loan calculator guide (April 2026)

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Calculator guide

How to use this DSCR calculator

This calculator shows whether your business has enough operating income to comfortably cover debt service. It also shows how much more income or headroom you need.

Why DSCR matters

Debt can feel affordable when revenue is strong. DSCR checks whether operating income still covers that debt when the month is not perfect.

That is why lenders and operators both use it as a quick safety test.

How to improve DSCR

There are only two direct ways to improve DSCR: raise operating income or lower debt payments.

That often means a stronger margin, better collections, or a safer debt structure.