Free calculator
How Much Can I Borrow? Calculator
Banks size a business loan from cash flow first. Enter your numbers to see the loan your cash flow supports, the way a lender would figure it.
Common questions
How do banks decide how much a business can borrow?
They start with cash flow. Take EBITDA, subtract owner distributions, and divide by the DSCR the bank requires, usually 1.25. That is the most you can pay on all loans in a year. Subtract what you already pay, and the rest is room for the new loan. Collateral then sets a second limit.
Why does the loan term change how much I can borrow?
A longer term means a smaller payment for each dollar borrowed, so the same yearly payment supports a bigger loan. At 8%, $150,000 a year of payments supports about $1.03 million over 10 years but only about $800,000 over 7 years.
Is this the amount a bank will approve?
It is the cash-flow limit, which is usually the first and biggest test. The bank will also check collateral, credit, your history, and the industry. The final number is usually the lower of what cash flow supports and what collateral covers.
What DSCR should I use?
Use 1.25 unless your banker tells you otherwise. Most regional and community banks use it, and SBA business acquisition loans now require 1.25 as well. Some large banks go to 1.15 for strong borrowers. Hotels and riskier deals often need 1.35 or more.