AFARI Capital Network Group
Debt Service Coverage Ratio
Debt service coverage ratio measures whether income is sufficient to cover debt payments.
Quick Answer
Debt service coverage ratio measures whether income is sufficient to cover debt payments.
Key Takeaways
- This term is commonly used in business funding or commercial capital review.
- AFARI uses education to help business owners understand lender and funding partner language.
- Definitions are general and do not replace underwriting criteria or legal advice.
Detailed Explanation
What Debt Service Coverage Ratio means in a capital review
Debt service coverage ratio measures whether income is sufficient to cover debt payments. In practice, the term may affect how a lender or funding partner reviews risk, repayment capacity, collateral, or file structure. AFARI helps business owners interpret these concepts before approaching capital sources.
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