What is DSCR (Debt Service Coverage Ratio)?
In commercial real estate finance, this is the main measure to determine if a property will be able to sustain its debt based on cash flow. Most banks will lend to a 1.2 DSCR, but at times with more aggressive practices you begin to see this number decreasing. A DSCR below 1.0 on a property indicates that there isn’t enough cash flow to even cover the loan.
