Commercial Loan Payment Calculator
*Commercial Loan Calculator is intended for creating sample payment scenarios
Debt Sercie Ratio Calculator
One important benchmark used by lenders is the Debt Service Coverage Ratio (DSCR) of a company. This is calculated by dividing the Net Operating Income by the Total Debt Service. The Net Operating Income (NOI) is your company’s revenue minus operating expenses, not including interest and takes payments. This is also known as EBIT (Earnings Before Interest and Taxes). This benchmark is used to determine how much cash is available to cover debt payments, including leases. Many lenders are looking for a Debt Service Ratio of 1.20 or higher. If your ratio is under 1.00, it means you are not able to support debt payments without dipping into savings or reserve funds.
Capitalization Rate Calculator (Cap Rate)
A Capitalization Rate, better know as the “Cap Rate”, is a real estate valuation method used to compare real estate investments. The ratio is the Net Operating Income (rent) produced divided by either the original capital cost or the current market value of the property.