LOC impact on DSCR

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January 06, 2026

by a searcher in Chicago, IL, USA

Does the underwriting bank assume a full draw on a LOC, for their DSCR calculation? Just wondering if I should be deducting LOC interest payments (assuming full draw) from cash flow for the purposing of calculating an accurate DSCR for the bank.
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Reply by a searcher
from University of Pennsylvania in Milwaukee, WI, USA
All mandatory debt payments are typically included in DSCR. For LOC, yes, they will assume fully drawn LOC but only the interest payments.
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Reply by a searcher
from University of Maryland at College Park in Brooklyn, NY, USA
Yes, Always go more conservative. And your valuation of the business should reflect that too.
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