Free tool

DSCR calculator for business loans

See whether your business generates enough cash to pay its term loan instalments and interest, the way a lender looks at it.

Your DSCR

1.71

Cash available: ₹24 lakh
Debt service: ₹14 lakh

Comfortably above 1

There is a cushion for a weaker year. The lender will still test whether the projections behind these numbers are realistic.

Stress test: if net profit falls by 20%, DSCR becomes 1.51.

For education only. Calculations run in your browser; nothing you enter is sent or stored. Results are indicative: lenders apply their own policies, and this is not an offer of credit or advice. Disclaimer

How this works

DSCR = (Net profit after tax + Depreciation + Interest on term loans) ÷ (Interest on term loans + Principal instalments due)

This is the version most commonly used in MSME term lending. Some lenders use variations, for example including lease rentals, so ask yours which definition it applies. Lenders calculate DSCR for every year of the loan and look at the average.

The bands shown (below 1, just above 1, comfortably above 1) are indicative and not a regulatory rule. What a lender considers acceptable is set by its own credit policy and depends on the industry and the security available.

Go deeper: Understanding DSCR.