Debt Service Coverage Ratio (DSCR)
The debt service coverage ratio is the ratio of cash available for debt servicing to interest, principal and lease payments. In real estate, DSCR is the primary measure to determine if a property will be able to sustain its debt based on cash flow. Senior loan documents typically impose a minimum DSCR. For much more on debt service coverage ratio, please consult our longer-form blog post on the topic.
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