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What debt service coverage ratio means
The debt service coverage ratio (DSCR) shows whether your cash comfortably covers your loan repayments. A ratio of 1.25 means £1.25 of cash for every £1 of repayment — a healthy cushion.
Why it matters
It is the number lenders trust most, because it focuses on cash rather than paper profit. Aim for at least 1.25 before applying. See the DSCR guide and the affordability calculator.
What it means for you
For the full definition see the glossary entry. Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
What DSCR do lenders want?
Often at least 1.25, giving a cushion above the repayments. Below 1.0 means the business cannot currently service the debt from its cash.
How do I improve my DSCR?
Increase the cash (collect faster, lift margin, cut waste) or reduce the repayments (borrow less, or extend the term). Both raise the ratio.
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