Commercial Loan Calculator
Use this calculator to estimate your debt service coverage with a new
commercial loan. If your debt service coverage is greater than 1.25, including
your new loan payment, you have a good chance of being approved.
Information and interactive calculators
are made available to you as self-help tools for your personal
use and are not intended to provide investment advice. Independent
Bank of Texas
can not and does not guarantee their applicability or accuracy
in regards to your individual circumstances. All examples are
hypothetical and are for illustrative purposes. We encourage you
to seek advice from qualified professionals regarding all finance
issues.
Definitions
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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