Glossary
DSCR
debt service coverage ratio
said: dee-ess-see-arr
Cash available to pay debt, divided by the debt payments. 1.25 means you generate $1.25 for every $1.00 of payments.
Why it matters to you
The single number that decides whether the deal gets financed. Most lenders want 1.15 or better after paying you a living wage. Below 1.0 the business can't cover its own loan and you'd be funding the difference personally, every month.