What is a "good" DSCR?

For term loans, banks usually want DSCR ≥ 1.50× (income covers 1.5× the debt service). For working-capital lines they accept ≥ 1.25×. Anything below 1.0 means the business doesn't generate enough cash to service the debt — almost certain rejection.

Where does Turnover come from?

ITRs and audited financials. For very small businesses, GST returns + bank statement inflows are the proxy. SigmaDSA pulls turnover from the GST section if it's filled, otherwise you enter it manually.

Why does my DSCR look very low (e.g., 0.13)?

Either the total debt service is overstated (check the Existing Loans section — closed loans still listed?) or the cash accruals are understated (depreciation + non-cash charges should be added back to PAT). Recalculate after fixing both inputs.

DSCR section — SigmaDSA Help

The DSCR (Debt Service Coverage Ratio) section of the Credit Evaluation editor — turnover, profit after tax, cash accruals, total debt service. Used for self-employed and business loans.

The DSCR section computes the Debt Service Coverage Ratio — the key underwriting ratio for self-employed and business loans. It tells the lender how comfortably the applicant's cash generation covers their debt obligations (existing + proposed).

DSCR section of the Credit Evaluation editor with Turnover, Profit After Tax, Cash Accruals, Total Debt Service, and the computed DSCR ratio visible — The DSCR section — financial inputs on top, the computed ratio at the bottom-right.

What's on the section

Income inputs

Turnover / Sales — gross annual turnover from ITRs / financials.
Profit After Tax (PAT) — bottom-line annual profit.
Depreciation — non-cash charge added back to PAT.
Director Remuneration — added back for closely-held companies (director's draw is effectively income to the family).
OD/CC Interest — interest on working capital lines (treated as a non-discretionary outflow).

Debt service inputs

Total EMI — sum of all existing term-loan EMIs from the Existing Loans section.
Proposed EMI — the EMI for the new loan being applied for.
OD/CC Interest — paid on running working-capital limits.

Computed output

Cash Accruals = PAT + Depreciation + Director Remuneration Total Debt Service = Total EMI + Proposed EMI + OD/CC Interest DSCR = (Cash Accruals + OD/CC Interest already added back) / Total Debt Service

The right-side card shows the computed DSCR Value in a large pill, plus the breakdown:

Total Inflows (cash accruals).
Total Debt Service (existing + proposed).
Surplus / Shortfall.

What lenders look at

DSCR	Verdict
≥ 2.00×	Strong — premium pricing available.
1.50× – 1.99×	Comfortable — standard term-loan pricing.
1.25× – 1.49×	Acceptable for working-capital; tight for term loans.
1.00× – 1.24×	Borderline — only some NBFCs accept.
Below 1.00×	Reject — debts exceed cash flow.

Common flows from this section

Apply for a new business loan → fill Turnover + PAT + Depreciation from latest ITR → enter Proposed EMI → click Calculate → review DSCR. If < 1.5×, either reduce the loan amount or extend the tenure (which lowers Proposed EMI).
DSCR looks lower than expected → check Existing Loans for closed accounts still listed as open; mark them Closed → DSCR recomputes.
Add back director remuneration → captured separately so the bank sees you're not double-counting the director's salary as both PAT and outflow.

How DSCR differs from FOIR

	FOIR	DSCR
Used for	Salaried applicants	Self-employed / business
Income base	Net monthly salary	Annual cash accruals (PAT + dep + remuneration)
Debt service	Monthly EMIs only	Annual debt service (EMIs × 12 + interest on WC lines)
Comfort threshold	< 50–60%	> 1.50×

DSCR section