We talk a lot about how lenders do things, the reason being that if you can understand that then you stand a good chance of being successful in obtaining the commercial borrowing you want.
Your financial accounts are what any lender will look at when assessing whether to lend to a trading business. The question is, what are they looking for?
Debt Service Coverage
Debt Service Coverage Ratio, or DSCR is the calculation lenders use to see how affordable borrowing is and how much leeway there is within the company’s finances to cope with bumps along the way. The ‘pass mark’ for DSCR changes between lenders and changes over time as lenders review the borrowing they have outstanding.
To help with this we have produced a few resources for you;
- A guide to DSCR, explaining how debt service works
- A short video to take you through things
- A template to download and use before you apply for business borrowing
You can access all this here or click the download button below;