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Loan Qualification Calculator

Most loan calculators tell you your payment. This one tells you whether a lender will actually approve you — and exactly what needs to change if they won't. Choose between a commercial DSCR analysis or a residential debt-to-income check.

Real lender benchmarksGap-closing guidanceNo signup required

1Net Operating Income (NOI)

Annual NOI = gross income minus operating expenses (before debt service). For a business loan, use EBITDA or adjusted net income.

2Proposed Loan Terms

Enter the loan amount you are requesting and the expected terms.

%

Most commercial loans have a 5- or 7-year call on a 20–25 year amortization. Selecting a balloon date shows the remaining principal due at maturity.

DSCR Benchmark Reference

≥ 1.25Conventional Bank / SBA 7(a) Preferred
1.15 – 1.24SBA 504 / Community Bank
1.00 – 1.14Marginal — Hard Money / Seller Finance
< 1.00Does Not Cover Debt Service

Enter your NOI and loan amount to see your DSCR and qualification status.

Frequently Asked Questions

What is DSCR and why do lenders use it?
Debt Service Coverage Ratio (DSCR) measures whether a property or business generates enough income to cover its debt payments. A DSCR of 1.25 means the income is 25% higher than the required debt service — giving the lender a cushion. Most conventional banks require a minimum of 1.25x. SBA 504 loans and community banks may go as low as 1.15x with strong collateral. Anything below 1.00x means the income doesn't cover the debt, and no institutional lender will approve the loan as structured.
What counts as NOI for a commercial loan?
Net Operating Income (NOI) is gross revenue minus operating expenses, before debt service, depreciation, and income taxes. For real estate, it's rent collected minus property taxes, insurance, maintenance, management fees, and vacancy allowance. For a business acquisition or equipment loan, lenders typically use EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) or adjusted net income from your tax returns.
What is the difference between front-end and back-end DTI?
Front-end DTI (also called the housing ratio) is just your proposed housing payment divided by gross income. Back-end DTI includes all monthly debt obligations — housing, car payments, student loans, credit card minimums, and other installment debt. Most lenders focus on back-end DTI. FHA loans allow up to 31% front-end and 43% back-end, though compensating factors can push the back-end to 45% or higher in some cases.
How do self-employed borrowers calculate income for DTI?
Lenders use a 2-year average of net self-employment income from your tax returns — typically Line 31 of Schedule C, or your K-1 distributions from an S-Corp or partnership. They add back depreciation and depletion but subtract business use of home and other non-cash deductions. This is why many self-employed borrowers appear to qualify on paper but struggle with lenders — their tax-minimization strategy works against them. We help business owners structure their financials to show the income lenders need to see.
Can I improve my DSCR or DTI before applying?
Yes — and this is exactly where working with a financial advisor pays off. For DSCR, strategies include increasing NOI through rent increases or expense reduction, restructuring the deal (lower purchase price, larger down payment, longer amortization), or improving the business's profitability before applying. For DTI, paying down high-minimum debts, avoiding new credit, and correctly documenting self-employment income can all move the needle. We've helped dozens of clients get loan-ready within 6–18 months.

Why Our Analysis Is Different

Our principal has reviewed 300+ commercial loans from the lender's side

For over 10 years, Carrie Anderson has served as a contracted commercial loan analyst for a Montana community bank — spreading financials, building loan packages, and providing recommendations the bank president relies on. She also supports the bank through FDIC examinations and regulatory reviews. The same analysis she applies to your loan package is the analysis lenders use to approve or deny it.

Close the Gap Between Where You Are and Where Lenders Need You to Be

Whether you're a business owner pursuing commercial financing or a self-employed borrower navigating residential lending, 406 Consulting Group has the financial structuring experience to get your numbers where they need to be — before you walk into a bank.

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