Business debt service calculator
Test a new payment against your deposits and operating income the way an underwriting desk will — before you submit anything.
Debt service and affordability calculator
Check a new payment against your deposits and operating income before a funding provider does.
Comfortable. Total debt service sits at or under 15% of deposits with coverage above 1.25x — the range most funding providers treat as a clean file.
Methodology and limitations
The new payment uses standard amortisation: P × r ÷ (1 − (1 + r)−n) with r = APR ÷ 12. Debt service ratio = total monthly payments ÷ monthly business deposits. Coverage ratio = monthly net operating income ÷ total monthly payments, the same shape as a DSCR. The 15% comfortable / 25% strained thresholds are widely used underwriting rules of thumb, not a guarantee: every funding provider sets its own limits, and daily or weekly remittance products are assessed on remittance load rather than a monthly payment. This is an estimate for planning, not an offer or approval.
How to read your ratios
The deposit ratio tells you how much of the cash moving through your account is already spoken for. The coverage ratio tells you whether what is left after operating costs still clears the payment. A file can pass one and fail the other: high-volume, low-margin businesses often look fine on deposits and thin on coverage, while a profitable business with a heavy existing position looks the opposite.
If the assessment comes back tight, the fastest levers are a smaller amount or a longer term. Model both with the loan payment calculator, and if you are weighing a revolving facility instead, price it with the line of credit calculator. To size a realistic request before you apply, use the qualification estimator.
Published thresholds by product sit on the qualifications page, and the structures themselves are compared across our funding products. If you are deciding between structures, read line of credit vs term loan and MCA vs term loan. Terms such as DSCR and UCC-1 are defined in the glossary, and current benchmarks are on the rates page.
For official guidance on how coverage is assessed in government-backed U.S. lending, the U.S. Small Business Administration publishes program terms, and the Business Development Bank of Canada publishes equivalent guidance for Canadian businesses.
Frequently asked questions
What is a debt service ratio for a business loan?
It is total monthly debt payments divided by monthly business deposits, expressed as a percentage. It answers a single question underwriting cares about: how much of the money moving through your account is already committed to repaying debt before anything else is paid.
What debt service ratio do funding providers look for?
As a widely used rule of thumb, total debt service under about 15 percent of monthly deposits reads as comfortable. Between 15 and 25 percent, offers are often reduced in size or shortened in term. Above roughly 25 percent, requests are commonly declined. Each provider sets its own limits.
What is DSCR and how is it different?
Debt service coverage ratio divides net operating income by total debt payments. A DSCR of 1.25x means you generate 1.25 dollars of operating income for every dollar of debt payment. The deposit ratio measures gross cash flow; DSCR measures profit after operating costs, so most desks look at both.
How can I improve my debt service ratio before applying?
Reduce the amount requested, extend the term so the monthly payment falls, pay off or consolidate a small existing position, or wait until deposits reflect a stronger few months. All four move the ratio without changing the business itself.
How are daily or weekly remittance products assessed?
Revenue-based products remit daily or weekly, so they are assessed on remittance load against daily deposits rather than a monthly payment. Convert a remit schedule to a monthly equivalent before entering it here so the comparison holds.
Does this work for Canadian businesses?
Yes. The ratios are calculated the same way in both countries. Switch the currency toggle to CAD so figures display in Canadian dollars; no conversion is applied to your inputs.
Is this a pre-approval?
No. It is a planning estimate that runs in your browser. Nothing is submitted, no credit inquiry is performed, and an actual decision depends on full underwriting by the funding provider.
Last reviewed: by the Simply Approved Business Loans editorial team.
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