Business Capital Calculator
Size a C&I loan by DSCR and Debt / EBITDA
This calculator sizes a lower-middle-market business term loan the way most lenders do. Enter cash flow, rate, term, and the coverage and leverage limits. It returns maximum proceeds and names the binding constraint: DSCR or Debt / EBITDA. i95 Capital uses the same tests when we structure business capital, including term loans, refinances, and acquisition facilities.
Calculator
Estimate only. Not a quote or commitment. For use on this page only. Reproduction is not permitted.
How It Works
C&I lenders generally take the lowest of two tests: debt service coverage and leverage. The calculator above runs both on the same file and names the binding constraint.
DSCR
Debt service coverage compares annual cash flow to annual debt service. A 1.25x minimum means $1.25 of cash flow for every $1.00 of principal and interest. Coverage moves when the rate, amortization, or an interest-only period changes the payment.
Debt / EBITDA
Leverage caps the loan against cash flow. A 4.0x maximum on $1.2 million of EBITDA is $4.8 million. This test does not move when the rate or amortization changes.
The maximum loan is the lower of the two. That lower test is the binding constraint.
Worked example
A company produces $1.2 million of annual cash flow. The lender quotes 8.50% with a 5-year term and 10-year amortization. Constraints are 1.25x DSCR and 4.0x Debt / EBITDA. The sponsor wants $5 million.
- Max by DSCR: about $6.45 million
- Max by Debt / EBITDA: $4,800,000
The binding constraint is leverage. The supportable loan is $4,800,000. At that amount, DSCR is about 1.68x, so coverage clears. The $5 million request fails 4.0x leverage (about 4.17x) even though DSCR still passes.
Raise cash flow and leverage loosens. Raise the rate or shorten amortization and DSCR can take over.
See business financing for how these tests show up by product or apply now.
Business Capital Sizing FAQs
What is the binding constraint?
It is the test that produces the lower loan amount. Lenders generally will not exceed that number even if the other test would allow more.
Why use Debt / EBITDA if DSCR already measures cash flow?
DSCR depends on the payment, so a lower rate or longer amortization can raise the supportable loan. Debt / EBITDA is loan amount divided by cash flow. It does not care about the coupon. It stops leverage from rising just because the payment got cheaper.
Should DSCR be sized on the IO payment?
Usually no for fully amortizing term debt. Use the IO box when the coverage test is the interest-only coupon, such as a short IO period at the front of the term.
Is this a loan quote?
No. It is a sizing estimate from the numbers you enter. Actual proceeds depend on underwritten cash flow, add-backs, existing debt, collateral, sponsorship, and the lender’s program.
Why is the interest rate 8.50%?
That figure is part of the example data. Enter the rate you are modeling. For current Treasury, SOFR, and Prime prints, see market rates.