If you have no idea, you may be turned down for a loan by a bank. While the debt service coverage ratio requirement will change from lender to lender, it’s still a good thing to know before you ask for a loan. It can help determine the terms of your conventional or merchant loan, making them more or less favorable based on how it comes out. Even merchant lenders will want to know what cash flow your business has by reviewing old receipts to determine whether the projected cash flow is realistic when it comes to paying back your debt.
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