Credit Analysis & Underwriting Series: Debt Service Coverage Calculations in Underwriting

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Which debt service coverage ratio (DSCR) calculation method should be used: EBITDA, UCA cash flow, or free cash flow? Should the primary or global DSCR result be used for underwriting? Should there be a provision for maintenance capital expenditures? What about Section 179 depreciation expense? Should a deduction for taxes and living expenses be included? Should the underwriting be based on the DSCR before or after distributions? What should be done with missing debt service schedules? Should loans to stockholders be included? Join this webinar to learn the answers to these questions and more.


  • Pertinent regulations
  • SBA’s requirements
  • Calculating debt service coverage, including EBITDA, UCA cash flow, and free cash flow approaches
  • Add-backs 
  • 179 depreciation expense
  • Net operating loss carry-forward
  • Other considerations, including rent payments, living expenses, capital expenditures (CapEx), and providing for tax liability
  • Schedule E Supplemental Income (Loss)
  • Regulatory expectations
  • Stress testing debt service coverage – two different components 
  • Repayment support – guarantor support analysis
  • Debt service coverage for CRE loans


  • Employee training log
  • Quiz to measure staff learning and a separate answer key

This informative session is designed for everyone involved with underwriting and approving commercial loans, including executive management on the loan approval committee, commercial loan officers, credit analysts, commercial loan underwriters, branch managers with commercial lending authority, loan review staff, and auditors.  

ABOUT THE PRESENTER – S. Wayne Linder, Young & Associates, Inc.
A thirty-year banking veteran, Wayne Linder was formerly the CEO of a community bank. As a Senior Consultant with Young & Associates, Wayne works as a lending and management consultant. He assists financial institutions under regulatory enforcement agreements, develops and implements written lending policies, and develops educational material for in-house lending training. Wayne is a popular seminar speaker with both national and international experience.

Originally recorded on February 21, 2019.

Recorded webinar is available until August 31, 2019.

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