Answer Book question
Debt Service Coverage Ratio is the cash available for loan payments divided by the loan payments due. A DSCR of 1.5 means you generate ₹1.50 for every ₹1 of EMI. Banks want a cushion. often 1.5 or more. because a business at exactly 1.0 has no room for a bad month. It is the single number most loan decisions turn on.
Debt Service Coverage Ratio is the cash available for loan payments divided by the loan payments due. A DSCR of 1.5 means you generate ₹1.50 for every ₹1 of EMI. Banks want a cushion. often 1.5 or more. because a business at exactly 1.0 has no room for a bad month. It is the single number most loan decisions turn on.
Projected annual cash after operating costs and tax: ₹9 lakh. Annual EMIs: ₹7.2 lakh. DSCR 1.25. The bank wants 1.5. Options: lower the loan, lengthen the tenure, or show higher revenue with evidence.
DSCR measures repayment safety. It is computed on the bank's assumptions, which are more conservative than yours.
Your DSCR on realistic numbers Bank's required minimum Sensitivity at 20–30 percent lower sales Levers: loan size, tenure, margin
Inflating revenue to hit the ratio; banks stress-test it.
Kerala Rising's project calculator shows DSCR under several scenarios.
Reduce loan from ₹30 lakh to ₹24 lakh; DSCR rises to 1.55; sanctioned.
None.
Compute DSCR Adjust the structure Present with sensitivity
What does a bank actually look for in a project report? What is break-even?
Loans, grants & subsidies
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