Lynxhollow Funding built this debt service coverage page for owners in Walla Walla, Washington. The calculator returns a monthly payment from an amount, a rate and a term; the steps below turn that payment into a DSCR, with invented examples for a winery and a landscaper, and compare this check with equipment, working capital and factor calculators.
How the debt service coverage ratio is worked out
- Use the calculator to get the monthly payment on the new loan.
- Multiply it by twelve for a year of payments.
- Add a year of payments on every existing loan, lease and line.
- Take the business's yearly operating income before those payments.
- Divide the income by the total yearly payments. The result is the DSCR.
A ratio above 1.0 means the income covers the payments with something left; below 1.0 means it does not. Each lender sets the ratio it wants to see, so treat the result as a check on your own numbers, not a test you pass or fail.
DSCR commercial loan calculator for Walla Walla, WA landscapers
Illustration only, invented figures: a winery earns $180,000 a year in operating income and already pays $54,000 a year on equipment and a line. It is considering a $250,000 loan at 9% over 7 years. The calculator gives a monthly payment of about $4,022, or $48,267 a year. Total yearly payments would be $102,267, and the DSCR is $180,000 divided by that, about 1.76 (our arithmetic).
The same steps apply to a landscaping company or a home builder; only the inputs change. County Business Patterns counted 74 winery employers and 59 residential building contractors in Walla Walla County, WA in 2023.
Equipment loan calculator vs this one: which fits a Walla Walla, WA winery
An equipment loan calculator answers "what is the payment on this machine?" This page adds the next question: "can the business carry it?" Illustration only, invented figures: a $120,000 bottling line at 8.5% over 60 months costs about $2,462 a month (our arithmetic). Run that payment through the steps above with the winery's other payments before signing.
For a landscaper with $95,000 of yearly operating income and no other debt, the same payment would give a DSCR of about 3.22 (our arithmetic, invented figures). Equipment financing covers loans and leases.
Working capital loan calculator: a second check for Walla Walla County, WA restaurants
A working capital loan has a short term, so its payment is high relative to the amount, and it can pull a restaurant's ratio down sharply even when the amount looks modest. Run the working capital payment through the same steps, using a year of payments even if the loan runs for less, to see the strain while it is outstanding.
County Business Patterns counted 111 restaurants and other eating places in Walla Walla County, WA in 2023. Working capital loans explains the product.
Factor rate calculator vs this one: which fits a Walla Walla, WA therapy practice
A merchant cash advance has no interest rate or fixed term, so this calculator does not fit it. An advance is priced with a factor and collected from card receipts. To compare it with a loan, total what the advance collects, estimate the days it takes, and set the dollar cost beside a loan's interest for the same days. A therapy practice paid mostly by insurers has little card volume, so a loan or line is usually the comparison that matters.
County Business Patterns counted 37 offices of chiropractors, therapists and other practitioners in Walla Walla County, WA in 2023. Merchant cash advances covers the factor arithmetic.
By Lynxhollow Funding · Updated