Dental Practice DSCR Calculator
Estimate your Debt Service Coverage Ratio (DSCR) for a practice acquisition or refinance — plus the monthly payment, headroom against your target ratio, and the maximum loan amount that would still meet it.
What Is DSCR and Why Lenders Use It
The Debt Service Coverage Ratio (DSCR) measures whether a practice’s normalized cash flow can cover its loan payments. It is calculated as Net Operating Income ÷ Total Annual Debt Service. Lenders use it — alongside credit history, collateral, and cash flow trends — to gauge how much cushion a deal has if collections dip. Every lender sets its own minimum, so treat the target ratio below as a planning assumption, not a quoted requirement, and confirm the actual threshold with your lender or lender's underwriter.
This tool is built for planning purposes: it estimates DSCR the way lenders typically frame the math, but it is not a lending decision, credit approval, or financial advice.
Enter Your Practice & Loan Numbers
Use trailing-twelve-month net collections, not gross production.
Staff, facility, supplies, lab, marketing — everything except owner/associate pay, interest, and loan principal.
Non-cash or non-recurring items lenders typically add back to reach normalized EBITDA.
A reasonable replacement salary for the dentist(s) running the practice day to day.
Not a quoted rate. As of December 2025, WSJ Prime is 6.75%; SBA 7(a) loans commonly run Prime + 2.25–2.75% (9.00–9.50%). Enter your lender’s actual quote when you have one.
SBA 7(a) acquisition loans commonly run 10 years; with real estate, up to 25.
1.25 is a commonly used planning benchmark, not a universal lender requirement. Some lenders accept lower; others require more.
Disclaimer: This calculator produces planning estimates only. It is not a lending decision, credit approval, pre-qualification, or financial advice. Actual underwriting depends on your lender’s specific DSCR requirement, credit profile, collateral, and full financial review. Verify every figure with your lender and accountant before making financing decisions.
Your DSCR Analysis
DSCR sensitivity across a range of loan amounts
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How to Use This DSCR Calculator
Enter your practice’s annual collections and operating expenses, add back any non-cash or non-recurring items, and decide whether to reserve a living wage for the working owner. Then enter the proposed loan amount, rate, and term. The calculator returns your DSCR, the monthly and annual payment, how much headroom (or shortfall) you have against your target ratio, and the maximum loan amount that would still hit that target.
The DSCR Formula
DSCR = Net Operating Income ÷ Total Annual Debt Service. Net Operating Income here starts from normalized EBITDA (collections minus operating expenses, plus add-backs for depreciation, amortization, interest, and one-time items) and, if selected, subtracts a required owner/associate living wage. Total Annual Debt Service is the new loan’s annual payment plus any other debt payments that continue after closing.
Why the Maximum Loan Amount Matters
Most DSCR tools stop at the ratio. The more useful number for planning a practice acquisition or refinance is the reverse calculation: given your normalized cash flow and target ratio, how large a loan could the deal actually support? This calculator solves for that loan amount using standard amortization math, so you can size an offer or a refinance before you ever sit down with a lender.
Why Target DSCR Is a User Input, Not a Fixed Rule
Every lender sets its own DSCR minimum based on loan program, collateral, and the borrower’s overall credit profile. 1.25 is a commonly cited planning benchmark, but some lenders will work with less and others require more. Ask your lender for their specific threshold before treating any number here as a lending decision. For a deeper walkthrough of how lenders actually apply DSCR to dental practice loans, see our DSCR explainer.
Related Resources
- Dental Loan Pre-Qualification Checklist
- Dental Practice Loan Calculator
- SBA Eligibility Checker
- Dental Practice Loans & Financing Guide
- SBA 7(a) Loans for Dental Practices
- Dental Practice Valuation Guide
- Dental Practice Finances Hub
Frequently Asked Questions
What is a good DSCR for a dental practice loan?
There is no single universal number. Many lenders look for a ratio comfortably above their own minimum, and 1.25 is a commonly used planning benchmark — but requirements vary by lender, loan program, and collateral. Ask your lender what they require before treating any ratio as a pass/fail line.
How is DSCR different from EBITDA or net income?
EBITDA and net operating income measure how much cash flow the practice generates. DSCR relates that cash flow to a specific debt obligation. Two practices with identical EBITDA can have very different DSCRs if one is financing a much larger loan or already carries other debt.
Should I reserve an owner’s living wage before calculating DSCR?
Many lenders expect the practice to support both the loan payment and a reasonable working-owner salary. Reserving a living wage before computing DSCR gives a more conservative, and often more realistic, picture of what the deal can actually support.
What does the maximum loan amount tell me?
It is the loan size, at your chosen rate, term, and target DSCR, that your normalized cash flow could support after other debt payments. It is useful for sizing an acquisition offer or a refinance request before talking to a lender — it is not a pre-approval or a guarantee of what any specific lender will offer.