Debt Service Coverage Ratio (DSCR)

What it means

A ratio above 1.0 means income exceeds obligations. Many lenders look for 1.25 or higher. In revenue-based funding the concept is applied more loosely, comparing deposits against the proposed withdrawal.

Why it matters when you apply

Underwriting for revenue-based business funding leans on bank activity, time in business, industry and existing positions. Where this term touches one of those, it can move a decision.

See the four factors that decide most files on the qualification page.

Related terms

Factor Rate — A multiplier — not an interest rate — used to price a merchant cash advance. A $50,000 advance at a 1.4 factor rate means you repay $70,000 in total.

Holdback — The fixed percentage of daily or weekly card and bank deposits that a funder withholds to repay an advance, commonly 10% to 20%.

ACH Debit — An automatic withdrawal pulled directly from a business bank account, used by most funders to collect daily or weekly payments.

Where this fits

Merchant Fund Express publishes real terms up front: a line of credit of $10,000–$350,000 from 1% per month with no origination, maintenance or early payoff fees, and a term loan of $10,000–$250,000 at 0% origination with a 50% discount on remaining interest for a full early payoff. See the products →

Common questions

What is debt service coverage ratio (dscr)?

A measure of whether a business generates enough income to cover its debt payments, calculated as net operating income divided by total debt service.

How does this affect my approval?

It depends on the factor it touches — industry, bank activity, time in business or existing positions. Those four decide most files.

Where can I see real rates and terms?

Every product page on this site publishes the amount range, term, rate and fee structure up front.