- What is Debt Service Coverage Ratio (DSCR)?
- DSCR measures a business’s capacity to pay its debt obligations with available net operating income. A ratio of 1.25 means the business generates $1.25 of cash flow for every $1.00 of required debt payment.
- How do origination fees affect the true cost of commercial borrowing?
- Origination fees are deducted from loan proceeds or added to the loan balance upfront. A 2% to 3% fee increases your effective APR, making the real borrowing cost higher than the stated nominal interest rate.
- What credit score is typically needed for a prime business loan?
- Traditional banks and SBA lenders typically require personal credit scores of 680 or higher, along with at least two years of profitable operating history and solid cash flow.