BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A higher DSCR indicates that an entity has a greater ability to service their debts, making it easier for them to obtain loans. Banks and lenders often use a minimum DSCR ratio as a loan condition, and breaching this covenant can sometimes be considered an act of default.

Detailed explanation-2: -It measures a property’s cash flow compared to its current debt obligations. An evaluation of a company’s DSCR gives the lender a good idea on whether the business can pay a loan back, on time, and with interest. The higher the DSCR number is, the more likely the business will be granted the loan.

Detailed explanation-3: -While there’s no industry standard of a good debt service coverage ratio in real estate, many lenders and conservative real estate investors will look for a DSCR of at least 1.25.

Detailed explanation-4: -A higher ratio indicates that there is more income available to pay for debt servicing.