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Debt service coverage ratio calculator

The single ratio a credit decision turns on, measured against the threshold in force for the programme you are applying under — with the guidance version printed so a loan officer can verify rather than doubt.

Earnings before interest, tax, depreciation and amortisation, for the year being tested.

Deducted, because tax is paid before debt service is.

Existing loans, equipment finance and capital leases already in place.

Debt service coverage

2.99×

Above the 1.10× threshold for SBA 7(a) Small. EBITDA could fall 53.2% before it does not.

Cash available for debt service
$202,000
EBITDA less cash taxes — the convention most SBA lenders apply to projections.
Monthly payment on this loan
$5,624
Annual debt service
$67,486
Most debt service this supports
$183,636
At exactly 1.10×, which is the floor rather than a target.

What this was measured against

SBA 7(a) Small coverage threshold: 1.10×

SBA Notice 5000-875701 · in force from 2026-03-01 (no end date on record)

Confidence: secondary.

7(a) Small Loan ceiling: $500,000

SBA SOP 50 10 8 · in force from 2025-06-01 (no end date on record)

Unverified — this figure is in our verification queue and must not be presented to a lender as authoritative.

How this is computed

Anyone whose plan is going to a bank. Founders submit plans; banks compute ratios, and this is the first one they compute.

  • Coverage is cash available for debt service over scheduled debt service. Cash available here is EBITDA less cash taxes.
  • The threshold is read from dated configuration for the programme, never hardcoded. Changing the date changes the threshold.
  • The headroom figure is how far EBITDA could fall before coverage reaches the threshold, which is the question a lender asks next.

What it will not tell you

A calculator that lists only what it does is a toy. These are the limits worth knowing before you quote the answer to anyone.

  • Global cash flow — the owner's personal income and obligations — is assessed alongside this in a real credit file and is not modelled here.
  • A ratio computed on projections is not a ratio computed on historicals, and lenders weigh them differently.

This number belongs in a document that agrees with it.

The full plan links every one of these together and blocks export until the prose and the model reconcile. Free to generate and read.

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