What does this corporate secured-loan DSCR calculator do?
This planning calculator tests whether a Korean corporation can cover its existing debt and a proposed secured loan with recurring business cash flow.
It also compares that cash-flow limit with a simplified net-collateral limit, because either repayment capacity or collateral coverage can become the binding constraint.
The model starts with annual EBITDA or property NOI and converts it into a CFADS proxy after cash adjustments.
It then calculates the proposed loan’s first 12 months of principal and interest, base and stressed DSCR, a reverse-sized DSCR loan limit, and the smaller combined limit.
Important boundary before you calculate
The default 1.30x target DSCR and 70% collateral-recognition ratio are editable scenario assumptions.
They are neither statutory approval thresholds nor universal Korean bank standards, so replace them with the terms supplied by the relevant lender or your internal credit policy.
Corporate DSCR versus an individual borrower’s DSR
The abbreviations look similar, but the numerator and intended use are different.
A personal DSR usually compares a person’s annual debt payments with annual income, while this DSCR compares business cash available for debt service with the debt service due during the same period.
Comparison of individual DSR and corporate DSCR| Measure | Cash or income base | Debt-service base | Display |
|---|
| Individual DSR | Annual personal income | Annual payments on all personal debt | Percentage |
| Corporate DSCR | CFADS, NOI, or another lender-defined cash measure | Principal plus interest for the review period | Multiple |
A 1.00x DSCR only means that the entered cash flow and annual debt service are arithmetically equal.
A result above 1.00x does not guarantee approval, and a result below an entered target is not an automatic legal rejection.
Building the annual CFADS proxy
An operating company may begin with normalized EBITDA, while a property-holding company may begin with NOI before financing costs.
Neither number is automatically cash available for debt service, so recurring cash adjustments must be deducted consistently.
Annual EBITDA or NOI
The starting measure of recurring operating cash generation before the proposed loan service.
Cash taxes
Use expected cash payments during the review period rather than only the accounting tax expense.
Maintenance capital expenditure
Include recurring replacement and repair spending needed to sustain operations.
Working-capital increase
Enter cash absorbed by higher inventory, receivables, or other operating working capital.
Other recurring cash outflows
Include recurring cash uses not already captured, while avoiding duplicate deductions.
Existing annual debt service
Add the next 12 months of principal and interest for all debt that remains outstanding.
Formula used by this calculator
CFADS proxy = EBITDA or NOI - cash taxes - maintenance capex - working-capital increase - other recurring cash outflows
Do not deduct property taxes, insurance, or repairs twice when they are already included in NOI.
Remove one-off gains and test delayed receivable collection separately, because an optimistic starting number can overstate repayment capacity even when every formula is correct.
First-year debt service by repayment method
The DSCR denominator is existing annual debt service plus the proposed loan’s principal and interest during its first 12 months.
Select the structure that matches the draft term sheet rather than choosing the method that produces the largest limit.
Equal monthly payment
The standard annuity formula produces one monthly payment from the monthly rate and total number of installments.
First-year debt service is the sum of the first 12 equal payments.
Equal principal
The same principal is repaid each month and interest declines with the outstanding balance.
The calculator sums the first 12 installments and displays the first month as the representative monthly payment.
Interest only during the review year
Only 12 months of interest enter the modeled denominator and principal is zero for that year.
This deliberately excludes balloon repayment and refinancing failure, so an interest-only result must never be treated as a complete maturity-risk test.
How the collateral and DSCR limits work together
The simplified collateral limit multiplies the entered collateral value by the user-entered recognition ratio and deducts senior claims.
The DSCR limit first finds the annual debt service available at the target ratio and then converts that capacity back into principal using the same rate, term, and repayment method.
Net collateral limit
max(collateral value x recognition ratio - senior claims, 0)
Available new debt service
max(CFADS / target DSCR - existing debt service, 0)
The combined limit is the lower of the net-collateral limit and the reverse-sized DSCR limit.
A collateral constraint points you toward valuation, recognition, lien priority, and senior-claim questions, while a DSCR constraint points you toward cash flow, existing debt, rate, term, and repayment structure.
Senior-claim warning
This arithmetic does not decide Korean registry priority, protected lease deposits, maximum secured-claim amounts, trust beneficiary rights, or actual liquidation proceeds.
Confirm the deductible amount with the lender and qualified legal or valuation advisers before relying on the collateral result.
Step-by-step workflow
- Normalize annual EBITDA or NOI using audited statements and the latest monthly management accounts.
- Enter cash taxes, maintenance capex, working-capital growth, and other recurring cash outflows without duplication.
- Add principal and interest due on every continuing loan during the next 12 months.
- Enter the latest supportable collateral value, recognition assumption, and confirmed senior deductions.
- Match the requested principal, offered interest rate, amortization term, and repayment method to the proposed term sheet.
- Replace the sample 1.30x target with the lender’s definition or your company’s approved internal hurdle.
- Set conservative stress assumptions for earnings, interest rates, existing debt service, and collateral value.
- Read base and stress DSCR, request headroom, the combined limit, warnings, and the binding constraint together.
Worked example: KRW 400 million proposed loan
Annual EBITDA or NOI of KRW 180,000,000 less KRW 50,000,000 of cash adjustments produces a KRW 130,000,000 CFADS proxy.
With KRW 25,000,000 of existing annual debt service, a KRW 400,000,000 loan at 5.5% over 10 years with equal payments produces about KRW 52,092,613 of first-year new debt service.
Base and stress example for a KRW 400 million corporate secured loan| Metric | Base | Stress | Assumption |
|---|
| EBITDA or NOI | KRW 180,000,000 | KRW 153,000,000 | 15% decline |
| CFADS proxy | KRW 130,000,000 | KRW 103,000,000 | KRW 50,000,000 adjustments retained |
| New-loan rate | 5.5% | 7.5% | +2.0 percentage points |
| Existing annual debt service | KRW 25,000,000 | KRW 27,500,000 | 10% increase |
| New first-year debt service | KRW 52,092,613 | KRW 56,976,849 | KRW 400 million, 10 years |
| DSCR | 1.686283x | 1.219269x | 1.30x target |
| Net collateral limit | KRW 600,000,000 | KRW 495,000,000 | 15% collateral-value decline |
| Reverse-sized DSCR limit | KRW 575,897,388 | KRW 363,170,445 | Target DSCR applied |
| Combined limit | KRW 575,897,388 | KRW 363,170,445 | DSCR is binding |
The base combined limit exceeds the request by about KRW 175.9 million, but the stressed limit falls short by about KRW 36.8 million.
That contrast suggests comparing a smaller principal, a different amortization period, repayment of existing debt, stronger recurring cash flow, or additional eligible collateral before treating the base case as comfortable.
A practical order for reading the results
1. Coverage multiple
Separate results at or above the target, above 1.00x but below target, and below 1.00x.
These labels describe arithmetic coverage, not a credit grade or approval decision.
2. Request headroom
A positive combined-limit-minus-request value is scenario headroom, while a negative value is a modeled shortfall.
Positive headroom is not a promise that the lender will approve the request.
3. Binding constraint
Review value, priority, and recognition when collateral binds; review cash flow, debt, rate, and tenor when DSCR binds.
Nearly equal limits can switch places after a small change in assumptions.
4. Stress gap
A base pass and stress shortfall show that the apparent cushion does not absorb the entered shocks.
Consider liquidity reserves, rate protection, debt reduction, and structural changes rather than relying on a single optimistic year.
Common use cases
- Factory-backed equipment financing: deduct maintenance capex and working-capital needs from normalized EBITDA, then stress the ramp-up period after investment.
- Working capital secured by an office building: verify the valuation and senior liens, and test whether new borrowing masks a recurring operating deficit.
- Rental-property company: use NOI after vacancy, collection loss, operating expenses, and recurring repairs, then stress tenant departures or rent reductions.
- Refinancing: avoid counting debt service from the repaid loan and replacement loan over the same period unless both payments will actually occur.
- Interest-only extension: test the next-year interest burden here, but document the separate source of balloon repayment or refinancing at maturity.
Documents that improve accuracy and items outside the model
Documents to prepare
- Three years of financial statements and current management accounts
- Cash-tax schedule and capital-expenditure budget
- Receivables, inventory, and payables movement schedule
- Next-12-month amortization schedule for every loan
- Current appraisal and Korean real-estate registry documents
- Lease schedule and confirmed senior-deposit information
Not modeled here
- Guarantee approval, sponsor support, and personal guarantees
- Credit rating, sector caps, and lender concentration policy
- Forced-sale discounts and legal distribution priority
- Stamp tax, appraisal fees, and mortgage-registration costs
- Prepayment penalties, commitment fees, and covenant tests
- Balloon principal, refinancing failure, and acceleration risk
Do not treat one-off asset-sale proceeds or doubtful receivables as recurring repayment capacity.
Seasonal businesses should also model monthly minimum cash balances and the exact timing of interest and principal dates.
What the current Korean supervisory rule establishes
The current Korean Banking Supervision Regulation was verified on August 2, 2026 through the National Law Information Center OPEN API.
It is Administrative Rule serial 2100000276094, rule ID 21829, issued as Financial Services Commission Notice 2026-10 on March 18, 2026 and effective April 1, 2026.
Article 27 requires banks to consider a borrower’s repayment capacity and transaction history when classifying asset quality and to maintain their own evaluation criteria.
Article 78 requires analysis of borrower risk, financial condition, and future repayment ability through internal credit-review, approval, and post-management systems.
The verified current rule does not state one statutory DSCR threshold for every Korean corporate secured loan.
This is why the target multiple and collateral-recognition ratio remain user inputs instead of being presented as binding law or a market-wide approval rule.
Frequently asked questions
Does a 1.30x DSCR guarantee approval?
No. It is an editable sample target, not a statutory approval line. The lender’s own definition, policy, and complete credit review control the decision.
Should I enter EBITDA or NOI?
An operating company can begin with normalized EBITDA. A company whose repayment source is property income can begin with NOI after operating costs. Remove duplicate cash adjustments in either case.
Where does depreciation go?
Do not deduct depreciation again when starting with EBITDA because it is non-cash and already excluded from that measure. Enter actual recurring maintenance capex instead.
What if working capital releases cash?
The interface accepts a non-negative increase. For a well-supported cash release, use a documented alternative scenario and keep the base case conservative instead of assuming the release repeats indefinitely.
Why can the interest-only limit look unusually large?
Only current-year interest enters the denominator, so balloon principal is absent. Separately test maturity repayment and refinancing failure before relying on that result.
What belongs in senior claims?
Enter mortgages, protected deposits, or other deductions the lender confirms will rank ahead of the proposed exposure. This calculator cannot determine legal priority or recovery value.
What if only the stress DSCR misses the target?
The base cushion does not absorb the entered shock. Compare lower principal, debt reduction, longer amortization, fixed-rate protection, extra collateral, and a larger liquidity reserve.
Sources and update basis
- National Law Information Center, current Banking Supervision Regulation, Administrative Rule serial 2100000276094, Articles 27 and 78, effective April 1, 2026.
- U.S. Office of the Comptroller of the Currency, Comptroller’s Handbook: Commercial Real Estate Lending, March 2022, for the NOI-to-annual-debt-service DSCR method and the need to consider amortization and cash-flow volatility.
- The sources establish regulatory boundaries and calculation methodology; they do not supply a universal Korean approval ratio or a market-wide collateral-recognition rate.
Sources last verified on August 2, 2026.
Recheck the current rule, lender term sheet, financial statements, and collateral records whenever regulation, credit terms, or company performance changes.
Recheck the result with actual schedules and collateral records
Replace every sample input with normalized accounts, a cash-tax and capex plan, loan-by-loan 12-month amortization, an appraisal, and confirmed senior claims.
Save both base and stress assumptions so the lender, accountant, and finance team can review exactly why DSCR or collateral becomes binding.