DSCR is one check lenders run. It is not the only one.
See how your project performs across lender-readiness checks, including credit signals and sensitivity analysis.
See how your project performs → Project Financing ScorecardHow to use this calculator
- Enter stabilised annual revenue, operating costs, taxes and maintenance capex, or tick the box to enter CFADS directly.
- Enter the debt facility, interest rate, tenor and repayment profile, or enter annual debt service directly.
- Set a downside case: a revenue shortfall and an operating cost overrun.
- Set the minimum DSCR you expect lenders to require, then read the base-case and downside-case results.
What is the DSCR ratio?
The debt service coverage ratio (DSCR) measures how many times a project’s operating cash flow covers its scheduled debt payments in a period. A DSCR of 1.00x means cash flow exactly covers debt service. Anything below 1.00x means the project cannot pay its lenders from operations alone.
- CFADS (cash flow available for debt service) is revenue less operating costs, taxes and maintenance capex or reserve contributions, before any debt payments.
- Debt service is the principal and interest due in the same period.
How to calculate the DSCR ratio for a project
Take a year of stabilised cash flow, subtract operating costs, taxes and maintenance capex to reach CFADS, and divide by that year’s principal and interest. Lenders usually test every period of the loan and focus on the minimum and average DSCR, so a single year is a screening view, not a full financial model.
How to read the result
- Below 1.00x: cash flow does not cover debt service.
- Between 1.00x and the lender’s minimum: debt service is covered but the cushion is too thin. Expect a smaller loan, a longer tenor or tougher terms.
- At or above the lender’s minimum: the project clears this test. Contracted, predictable revenue is often sized to a lower DSCR than merchant or volatile revenue, and requirements vary by lender.
Why the downside case matters
Lenders rarely size debt on the base case alone. They stress revenue and costs to see whether the project still covers debt service when things go wrong. A project that clears its target in the base case but falls below 1.00x under a modest downside has little room for error, and lenders will see that quickly.
Frequently asked questions
What is a good DSCR for project finance?
It depends on the sector, revenue certainty and lender. Projects with long-term contracted revenue are often sized to lower coverage than projects exposed to market prices or volumes. Treat any figure here as indicative and check the requirements of the lenders you are approaching.
What is the difference between DSCR and LLCR?
DSCR tests coverage period by period. The loan life coverage ratio (LLCR) compares the present value of CFADS over the loan life to the outstanding debt, so it shows whether the project can repay the whole facility, not just a single year’s payment.
Is this the same as a DSCR loan calculator for rental property?
No. Residential and rental-property DSCR loans test one property’s rent against its mortgage payment. This calculator is built for project finance, where cash flow comes from an operating project such as infrastructure, energy or industrial assets.
Why does the calculator show the first-year payment for straight-line repayment?
With declining payments, the first year carries the highest debt service, so it gives the most conservative DSCR for flat cash flow. Later years improve as principal is repaid.
This calculator is provided for informational and educational purposes only and does not constitute financial, legal, investment or tax advice. It uses simplified single-year, annual-period assumptions with no grace period, fees, reserve accounts or cash flow growth, and does not replace a financial model. Lender requirements vary and no financing outcome is guaranteed.
