What is debt service coverage ratio (dscr)?
Debt Service Coverage Ratio (DSCR): How many times over your cash flow covers your loan payments.
How it works
DSCR = EBITDA / Annual Debt Service. Bank lenders typically want 1.25× or higher. Factoring doesn't use DSCR because it isn't debt.
Where you will run into it
Debt Service Coverage Ratio (DSCR) comes up most often in sba & term loans conversations. See how sba & term loans works, including real cost ranges and timelines.
Related terms
Debt Service Coverage Ratio (DSCR) questions
How many times over your cash flow covers your loan payments.
DSCR = EBITDA / Annual Debt Service. Bank lenders typically want 1.25× or higher. Factoring doesn't use DSCR because it isn't debt.
Funding Requirements Checklist for US manufacturers
See exactly what underwriters actually look at — for factoring, PO financing, equipment, working capital, ABL, and SBA — before you fill out a single application.
- What documents you need for each program
- Typical time-to-fund by program
- Common disqualifiers worth knowing up front
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