Coverage, debt yield and borrowing base.
Size debt service coverage, interest coverage and debt yield, stress them against a covenant floor, then switch tabs to compute revolver availability from receivables and inventory. Runs in your browser, nothing is sent anywhere.
Calculator
Coverage
Stress matrix
| Scenario | DSCR | ICR | Debt yield | Covenant |
|---|---|---|---|---|
| Base case | 1.77x | 2.14x | 15.00% | Pass |
| EBITDA x 0.85 | 1.50x | 1.82x | 12.75% | Pass |
| Rate + 150 bps | 1.55x | 1.76x | 15.00% | Pass |
Year-1 interest is approximated as loan amount times the all-in rate; on an amortising loan the true first-year interest is slightly lower. The rate shock recomputes both debt service and interest at the higher rate.
Availability
A negative headroom is an over-advance: the outstanding balance exceeds the availability the borrowing base supports.
Illustrative calculator. Results depend on the inputs you enter. Nothing here is an offer or financial, investment, legal or tax advice. For qualified counterparties only.
The formulas behind the numbers.
Each line below is exactly what the calculator computes. Rates are fractions, amounts are annual USD, and the covenant floor F is the minimum DSCR the loan agreement requires.
| Measure | Formula | Notes |
|---|---|---|
| All-in rate | r = SOFR + spread | SOFR is the New York Fed's broad measure of the cost of borrowing cash overnight collateralised by Treasury securities.[1] SOFR in percent, spread in basis points. 4.30% + 270 bps = 7.00%. |
| Debt service, amortising | DS = 12 x D x (r/12) / (1 - (1 + r/12)^(-12n)) | Level monthly payment (annuity formula) times 12, n in years. With r = 0 it becomes D / n. |
| Debt service, interest only | DS = D x r | Used when amortisation is 0 years. Year-1 interest uses the same approximation on every loan. |
| DSCR | DSCR = (EBITDA - CapEx) / DS | The OCC defines DSCR as cash flow or NOI divided by debt service.[2] This calculator uses EBITDA less maintenance CapEx as cash flow; for real estate, enter NOI and leave CapEx at 0. |
| ICR | ICR = EBITDA / interest | This calculator's definition. Interest excludes scheduled principal, so with positive EBITDA it is never below DSCR on the same inputs. |
| Debt yield | Debt yield = NOI / D | The OCC defines debt yield as NOI divided by the loan amount, independent of rate and amortisation.[2] The calculator uses the EBITDA / NOI field as NOI. |
| Breakeven EBITDA | EBITDA* = F x DS + CapEx | Cushion is (EBITDA - EBITDA*) / EBITDA: how far cash flow can fall before the floor is breached. |
| Stress rows | EBITDA x 0.85, r + 150 bps | The OCC expects interest rates and DSCRs to be stress-tested;[2] the shock sizes here are illustrative. The EBITDA shock also lowers debt yield. The rate shock recomputes DS and interest, so debt yield is unchanged. |
| Borrowing base | NBB = AR x (1 - ineligible) x adv_AR + Inventory x adv_Inv - Reserves | The OCC cites common AR advance rates of 70% to 85% of eligible receivables and inventory advances of up to 65% of book value.[3] The 85% and 50% defaults are editable; each facility sets its own. |
| Headroom | Headroom = NBB - Outstanding | Negative headroom is an over-advance of the same amount.[3] |
Rekord AI
The ratios are the easy part. The evidence behind them is the work.
Rekord AI spreads the financials with deterministic formulas, including DSCR, Debt Yield and the ABL borrowing base, and produces factor-attributed scorecards with a cryptographic audit trail. Every documentary figure is stored with its value, a rationale and the source document, resolved against the dataroom manifest, and an analyst can click a figure to see the line in the original statement. It runs inside your perimeter.[4][5]
Learn the fundamentals.
Plain-English guides from the Rekord Education Hub on the concepts behind this page.
All guides Frequently asked questions
What is a good DSCR?
There is no single number. The OCC Comptroller's Handbook on commercial real estate lending says the appropriate DSCR should consider the amortisation period and the expected volatility of the cash flow: a lower DSCR can suit stable cash flows such as long-term net leases to highly creditworthy tenants, while volatile cash flows such as hotels may warrant a higher one. A DSCR of 1.00x means cash flow exactly covers debt service with no cushion. The 1.25x floor in this calculator is an editable illustrative input, not a recommendation.
Copy link How do you calculate DSCR?
The OCC defines DSCR as cash flow or net operating income divided by debt service. This calculator uses EBITDA less maintenance CapEx as the cash flow; for a property loan, enter NOI and leave CapEx at 0. Annual debt service is principal plus interest for the year: the monthly level payment times 12 on an amortising loan, or the balance times the all-in rate on an interest-only loan.
Copy link What is debt yield?
The OCC defines debt yield as net operating income divided by the loan amount, expressed as a percent. It is independent of the interest rate, amortisation period and capitalisation rate. The OCC notes that debt yields reflecting normalised or higher rates can be used to set stressed loan amounts, and that debt yield should be supported by prudent DSCR and LTV ratios.
Copy link What is the difference between DSCR and ICR?
DSCR compares cash flow with total debt service, meaning interest and scheduled principal. On this page ICR, the interest coverage ratio, is EBITDA divided by year-1 interest alone. Because interest never exceeds total debt service and CapEx is never negative here, ICR is at least as high as DSCR on the same inputs whenever EBITDA is positive. A borrower can pass an interest coverage test and still fail a debt service test when amortisation is heavy.
Copy link What is a borrowing base?
The OCC Comptroller's Handbook on asset-based lending describes the borrowing base as the collateral base, agreed by borrower and lender, that limits the amount the lender will advance. It specifies the maximum amount that can be borrowed by collateral type, eligibility and advance rates, and the loan agreement sets how often it is recalculated. Lenders can also establish reserves: deductions from collateral value for liquidation costs, dilution, inventory obsolescence or other factors affecting collectability.
Copy link What is an over-advance?
The OCC defines an over-advance as the part of a revolving facility that exceeds the availability calculated by the borrowing base: a revolver with a $100 balance and a $90 borrowing base is over-advanced. The OCC notes that the primary source of repayment is typically operating cash flow, that over-advances beyond prudent advance rates should have a defined short-term repayment plan, and that most banks do not allow one above 10 to 15 percent of the borrowing base.
Copy link Sources
The definitions, formulas and figures on this page come from these documents.
- Federal Reserve Bank of New York, Secured Overnight Financing Rate Data SOFR definition and daily publication by the New York Fed
- OCC, Comptroller's Handbook: Commercial Real Estate Lending (Version 2.0, March 2022) DSCR and debt yield definitions, DSCR and debt yield as covenants, stress-testing rates and DSCRs
- OCC, Comptroller's Handbook: Asset-Based Lending (Version 1.1, January 2017) Borrowing base, eligibility, advance-rate ranges, reserves and over-advances
- Rekord, Rekord AI Rekord AI spreading, citations, scorecards, audit trail and perimeter deployment
- Rekord, Auditable AI Credit Underwriting for Direct Lenders Clicking a figure in the spread to see its line in the source statement
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