Commercial Loan
Calculator – DSCR Calculator – Definitions
Commercial loan amount
Total amount of your
loan.
Amortization
Payment period in years.
Interest rate
Annual interest rate for
this loan. Interest is calculated monthly on the
current outstanding balance of your loan at 1/12 of
the annual rate.
New monthly payment
Monthly payment for this
loan.
Annual Verifiable net
income
Your annual net income
from IRS tax returns or other financial statements.
Annual depreciation expense
Since depreciation
reduces your net income, but not your cash flow, we
add back depreciation in calculating your total net
cash income.
Other non-cash charges
Like depreciation, these
are other non-cash charges to your net income that
should be added back to calculate your total net
cash income for the year.
Real estate mortgage
Your monthly payment for
any real estate mortgages.
Business line of credit
Your monthly payment for
any business lines of credit.
Auto loans
Your monthly payment for
any auto loans.
Credit cards
Your monthly payment for
any credit cards.
Other loans
Your monthly payment for
any other outstanding loans.
Monthly debt payments
eliminated
Enter the amount, if
any, of the monthly obligations you entered above
that will be paid off by this new loan.
Debt Service Coverage (DSC)
The Debt Service
Coverage (DSC) is determined by dividing the total
annual net cash income by the total annual debt
service. If you have a DSC of 1.25 or higher, there
is a good chance that you will be approved for your
loan.
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