Debt Capacity Calculator

Estimate maximum debt from EBITDA or NOI using leverage, interest rate, amortization, and minimum DSCR. This is a screening estimate, not lender advice.

View all free tools

Inputs

EBITDA or NOI

Use the annual cash flow metric lenders underwrite.Target leverage

Example: 3.0x EBITDA or NOI.Interest rate

Annual fixed rate. Zero is handled as straight-line principal.Amortization / term

yrs

Annual payment periods used for debt service.Minimum DSCR

Most lenders require a coverage cushion above 1.0x.

Estimated max debt

$3,000,000

Leverage binds

Max debt by leverage

$3,000,000

Income × target leverage

Max debt by DSCR

$3,194,168

Supported by debt service capacity

Implied annual debt service

$751,369

Payment on the binding debt amount

Implied metrics

1.33x DSCR

25.0% annual debt service rate

Maximum annual debt service is $800,000. The calculator compares that DSCR-supported amount with 3.00x leverage and uses the lower number as capacity.

How the debt capacity estimate works

Lenders usually size debt with more than one constraint. A leverage multiple caps debt relative to EBITDA or NOI. A DSCR test caps debt service relative to the same cash flow. The lower debt amount is the practical ceiling.

Debt capacity = MIN(Income × leverage multiple, Max debt service ÷ payment factor)

Max debt service = EBITDA or NOI ÷ minimum DSCR

Payment factor = annual amortizing loan payment per $1 of debt

Implied annual debt service = selected debt capacity × payment factor

Related tools

DSCR Calculator

Check coverage ratios for a known annual debt service amount.

Loan Amortization Calculator

Build a payment schedule for the debt amount you choose.

Use this as a first-pass screen

Actual lender sizing can include fees, reserves, cash sweeps, covenants, taxes, variable rates, balloon payments, collateral limits, and credit adjustments. Treat this calculator as a quick estimate before building a full model or requesting term sheets.

Debt capacity is the estimated amount of borrowing a business or property can support based on cash flow, leverage limits, interest rate, amortization, and minimum DSCR requirements.

The binding constraint is the limit that produces the lower maximum debt amount. If leverage binds, the target EBITDA or NOI multiple is tighter. If DSCR binds, debt service coverage is tighter.

Shorter amortization periods require larger annual principal payments, which raises annual debt service and lowers the debt amount that can fit inside the required DSCR.

Use the cash flow metric lenders underwrite for the loan. Corporate loans often use EBITDA. Real estate loans usually use NOI after operating expenses and before debt service.

Alex Tapio

Founder of Finamodel • Professional Financial Modeller • Ex-Deloitte

alextapio.com @alextapio contact@finamodel.com

Need a full financing model?

Use the calculator to screen debt capacity, then move to a full model for covenants, scenarios, and lender-ready schedules.