Seeking a Loan health calculator

Lenders ask a short list of ratio questions. This view consolidates them from numbers you already entered in an industry calculator, and lets you fill the gaps (income, debts, values) that a credit memo will still request. It is a rehearsal, not an approval.

Who this is for

Owners preparing a conversation with a bank, CDC, credit union, or private lender. It is also useful if you just want to see whether leverage is already high before you shop rates.

What to enter first

Fill an industry calculator first so revenue, expenses, and (when relevant) property fields exist. Then add household DTI inputs, loan amount, value, and debt service. Rough estimates are allowed; fantasy values are not useful.

Worked example: cafe owner adding a $90,000 equipment loan

Uses the same cafe figures as the Food & Beverage guide, plus household and loan fields. Original composite.

  • Business NOI proxy: $28,400 net is not NOI; use a lender-style NOI. Suppose owner add-backs of $22,000 (half of owner salary already in labor, conservative): working NOI = $50,400.
  • Existing annual debt service:
  • Owner household: $7,200 / month gross pay from the cafe W-2 plus spouse income $3,400; personal debts $2,050 / month.
  • If a blanket lien looks at business assets of
  1. Proposed DSCR = 50,400 ÷ 40,200 = 1.25× exactly at a common small-business discussion threshold. There is no spare tire. A 10% sales dip breaks the story.
  2. Household DTI = 2,050 ÷ (7,200 + 3,400) = 19.3% before the new
  3. This is why Seeking a Loan sits beside the industry calculators instead of inside them: the file is both entity and household.

If either DSCR or DTI is barely clearing a common threshold, the honest move is to cut the ask, extend term, or wait a season — not to shop five banks with the same thin package. The page will not tell a lender to say yes.

How to read the results

DTI is household. DSCR is cash from the operation vs. debt service. LTV/CLTV/LTC are collateral stories. Debt yield is NOI vs. loan size (common in commercial real estate). Current and quick ratios are liquidity. Interest coverage is EBIT vs. interest. None of these is a credit decision.

Mistakes that make the math useless

  • Using revenue instead of NOI in DSCR.
  • Leaving spouse income out of DTI, or leaving car payments out.
  • Appraising the building at the price you need for 75% LTV.

When to re-run the check

Whenever the term sheet changes, or after you update the industry profile that feeds this view. Export the dashboard for an advisor if you want a packet; it is still not an application.

Will this tell me if I am approved?

No. Underwriting uses tax transcripts, credit, industry, and policy. This is the math they often start with, so you are not surprised.