THE BARATELLI INSTITUTE · Mentoring at Scale · baratelliinstitute.com
The Baratelli Institute · Mentoring at Scale

The Lender's Eye

The one number that approves your loan.

Before a bank funds your business purchase, it asks a single question: after you pay yourself, does the business throw off enough cash to cover the loan — with room to spare? That ratio is the DSCR, and lenders want it at about 1.25 times or better. Set the deal below and watch the loan officer decide in real time. The math is real; the verdict is illustrative.

Coverage (DSCR)
1.20×
Loan payment / mo
$12,145
Loan amount
$900,000
1.0× · breaks eventhe 1.25× line2.0×
“Right at my line. Approvable, but tight.”

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Educational references and tools — not legal, tax, accounting, or investment advice, and not a recommendation to buy or sell any security. Consult a qualified professional about your specific situation. © 2026 The Baratelli Institute.