What does Debt Service Coverage Ratio mean?
A. To put it simply, Debt Service Coverage Ratio, otherwise known as DSCR, is the number that indicates how profitable the commercial property is. For example, a DSCR ratio of 1.50 means that for every dollar you spend on the property to keep it running, you are bringing in $1.50 in income. As a standard, the lowest DSCR that most lenders will accept is 1.25.
