Borrowing Calculator

Business in Practice · Decision Lab

Owner's Borrowing Calculator

Estimate what the business can borrow without giving up its financial breathing room. Test the loan, the project, and the assumptions that may be wrong.

Reset example Print lender report

Choose an industry starting point. The safety settings remain editable.

Restaurant Retail Service business Manufacturing

Restaurant preset: stronger reserve coverage for seasonality and operating volatility.

Inputs

Business and project

Current business

Annual NOIBefore principal and interest payments

$

Current annual debt paymentsPrincipal and interest

$

Cash reservesUnrestricted cash available to the business

$

Seasonal fluctuationsYesNo

New loan

Interest rate

%

Loan term

yrs

Amount being considered

$

$0Calculated safe maximum: —$1,000,000

Use maximum safe loan

Investment

Expected increase in annual profitBefore the additional operating expenses below

$

Time until profit begins

mos

One-time project costsInclude buildout, equipment, fees, and working capital

$

Additional annual operating expenses

$

Safety policy

Target minimum DSCR

x

Sales decline used for recommendation

%

Minimum reserve coverage

mos

Seasonality reserve add-on

mos

Low end of recommended range

%

Recommended borrowing range

Calculating…

—Risk score

Calculating risk

The score combines debt coverage, downside resilience, reserves, and project timing.

DSCR after loan

—

Cash after debt

—

Reserve coverage

—

Stress test

—

Monthly new payment—

Break-even profit—

Payback from today—

Return on borrowed capital—

Cash flow before and after the loan

Annual cash flow before debt, debt payments, and cash remaining.

DSCR as borrowing increases

The line shows downside DSCR. The horizontal line is your minimum target.

What if I'm wrong?

Challenge the projection

These assumptions create a second, harsher view without changing your base case.

Profit begins later by

mos

Project costs more

%

Rate increases before closing

pts

Profit reaches only

%

Use this stress case when calculating the safe-loan range.
The maximum also requires nonnegative first-year cash after debt.

Comparison

Base case vs. Stress case

Metric	Base case	Stress case
Interest rate	—	—
Project cost	—	—
Annual profit achieved	—	—
Steady-state DSCR	—	—
First-year cash after debt	—	—
Reserves after project	—	—

Reviewing the downside

Downside scenarios

What happens if sales decline?

The model reduces both current NOI and the projected profit increase. Debt payments do not decline with sales.

Sensitivity analysis

DSCR by rate and profit achieved

Each cell uses the loan amount being considered. Green meets your target. Yellow stays above 1.0x but misses the target. Red falls below 1.0x.

Meets targetBelow targetBelow 1.0x

Borrowing review

Executive summary

Key results

Assumptions

This calculator is an educational planning tool, not a loan approval, valuation, accounting opinion, or guarantee. Results depend on the assumptions entered. Review taxes, lender covenants, collateral, fees, and cash-flow timing with qualified advisors before borrowing.