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    Commercial Loan Sizing Calculator

    Estimate how much commercial debt a property's NOI may support at your selected DSCR, rate, and amortization. This is a sizing estimate, not an approval.

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    Estimated Maximum Loan Amount

    $2,706,392.25

    This estimate is based on the DSCR constraint alone. Lenders also consider loan to value (LTV), borrower credit, property condition, and market factors when determining maximum loan size. Actual approval amounts may differ.

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    How Lenders Size a Maximum Loan

    Lenders size a commercial loan by working backward from the property's income. They start with net operating income, divide it by their minimum debt service coverage ratio to find the maximum annual debt service the property can support, and then convert that debt service into a loan amount using the quoted rate and amortization period. This calculator runs that exact sequence.

    Max Annual Debt Service = NOI / Minimum DSCR
    Max Loan = payment to loan conversion at the given rate and amortization

    Worked Example

    A property produces $300,000 in NOI and the lender requires a 1.25x minimum DSCR. Maximum annual debt service is $300,000 / 1.25 = $240,000, or $20,000 per month. At 7.5 percent with a 25 year amortization, a $20,000 monthly payment supports a loan of roughly $2,700,000. Raise the rate or shorten the amortization and the supportable loan shrinks, even though the property's income has not changed.

    Max Annual Debt Service = $300,000 / 1.25 = $240,000
    Max Loan ≈ $2,700,000 at 7.5% over 25 years

    DSCR Is Not the Only Constraint

    The DSCR sizing in this calculator is one of three constraints lenders typically apply. Loan to value limits, generally 65 to 80 percent for most commercial property types, cap the loan against the appraised value. Some lenders, especially CMBS and institutional programs, also apply a debt yield floor. The final loan amount is the lowest of the three, so run our debt yield calculator alongside this one when you are sizing a deal.

    How to Increase Your Maximum Loan

    Because the sizing math starts with NOI, anything that raises income or lowers operating expenses raises the supportable loan. Beyond the property itself, a lower rate, a longer amortization, or a lender with a lower DSCR floor all increase proceeds. Different lenders apply meaningfully different DSCR floors and amortization schedules, which is why the same property can support very different loan amounts across programs.

    Frequently Asked Questions

    For income property, lenders typically size the loan to the lowest of three constraints: the DSCR constraint, the loan to value limit, and in some programs a debt yield floor. The DSCR constraint divides NOI by the minimum required coverage ratio to find the maximum debt service, then converts that into a loan amount at the quoted rate and amortization.

    A property with $300,000 in NOI facing a 1.25x DSCR requirement can support at most $240,000 in annual debt service. At 7.5 percent over 25 years, that debt service supports a loan of roughly $2.7 million. A stricter DSCR floor or a higher rate reduces the number.

    Higher rates consume more of each payment as interest, so the same monthly payment supports less principal. When rates rise, the maximum loan a property's income can support falls even though the NOI is unchanged. This is why proceeds on the same deal can shrink between application and closing in a rising rate environment.

    Generally yes. Stretching the amortization from 20 to 30 years lowers the payment per dollar borrowed, so the same maximum debt service supports a larger loan. Not every lender offers 30 year schedules, and shorter amortizations are common on older properties.

    The lender uses the lower number. If the DSCR math supports $2.7 million but the property appraises at $3.2 million and the lender caps leverage at 75 percent LTV, the loan is limited to $2.4 million. The most restrictive constraint always wins.