Business Loan Eligibility Calculator
Use this free business loan eligibility calculator to estimate how much your business could borrow before you apply. Enter annual revenue, profit margin, the DSCR your lender requires, and the loan's APR and term to see your net operating income, the maximum monthly payment your cash flow supports, and the maximum loan amount — plus a coverage verdict as a rough eligibility guide.
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Eligibility breakdown
| Item | Amount |
|---|
NOI vs max debt service
Estimates for planning only — not lending advice and not a loan offer. Real underwriting also weighs credit history, time in business, collateral, industry risk, and existing debts. Fees, taxes, and insurance are not included.
How to use this calculator
Enter your annual revenue — total yearly sales before expenses — and your profit margin as a percentage of that revenue. The two are multiplied to get your net operating income (NOI), the cash-flow figure lenders underwrite against.
Add the DSCR requirement your lender uses (1.25 is the most commonly quoted minimum; most bank and SBA lenders ask for 1.20–1.35), then the loan APR and term in years you are considering. Results update instantly as you change any input.
The headline figure is the maximum loan amount your cash flow supports at that DSCR, alongside the maximum monthly payment. The coverage verdict band (strong, marginal, or weak) is a rough guide showing how your DSCR requirement compares with typical lender minimums — not a lending decision.
How it works
The calculator follows the same logic a lender's credit desk uses, in three steps:
1. Net operating income: NOI = annual revenue × profit margin. For example, $250,000 revenue at a 20% margin gives $50,000 of NOI.
2. Maximum debt service: max annual payment = NOI ÷ DSCR. At a 1.25 DSCR, $50,000 of NOI supports at most $40,000 per year — $3,333.33 per month — of loan payments.
3. Maximum loan amount: the monthly payment is converted to a lump sum with the present value of annuity formula: P = PMT × (1 − (1+r)−n) ÷ r, where PMT is the max monthly payment, r is the monthly rate (APR ÷ 1200), and n is the number of payments (years × 12). With a 0% APR the max loan is simply PMT × n.
Assumptions: the APR stays fixed for the whole term; payments are equal and monthly; no fees, taxes, insurance, or existing debt payments; your profit margin stays constant. All figures are estimates for planning — not lending advice and not a loan offer.
Frequently asked questions
How is business loan eligibility calculated?
Lenders estimate eligibility from your net operating income (NOI) and the debt service coverage ratio (DSCR) they require. NOI equals annual revenue times your profit margin, and the maximum annual debt service is NOI divided by the DSCR. That annual figure is converted to a monthly payment and then to a loan amount with the present value of annuity formula: P = PMT x (1 - (1+r)^-n) / r, where r is the monthly rate (APR divided by 1200) and n is the number of monthly payments.
What is DSCR and what DSCR do lenders require?
DSCR (debt service coverage ratio) measures how many times your operating income covers your debt payments: DSCR = NOI / annual debt service. A DSCR of 1.25 means your income covers debt payments with a 25% cushion. Most bank and SBA lenders require a minimum DSCR between 1.20 and 1.35; online lenders may accept lower ratios but usually charge higher rates. The calculator defaults to 1.25, the most commonly quoted minimum.
Does a higher profit margin increase how much I can borrow?
Yes, directly. At a fixed DSCR, every extra dollar of net operating income raises the maximum affordable payment by 1 / DSCR dollars per year. Because NOI is revenue times margin, a higher margin on the same revenue means higher NOI and therefore a larger maximum loan. Two businesses with the same revenue can qualify for very different loan amounts if their margins differ.
Is this an approval guarantee or a loan offer?
No. This calculator estimates borrowing capacity from revenue, margin, and DSCR only. Real underwriting also weighs personal and business credit history, time in business, collateral, industry risk, and existing debts. The eligibility verdict band is a rough guide, not a lending decision, and the figures are estimates for planning, not lending advice and not a loan offer.