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DSCR Loans
DSCR Loans for Real Estate Investors
Cash-flow based financing for rental properties. Approval primarily based on property income — not personal tax returns.
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20–35%
Down Payment
30–75 Days
Closing Time
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5–8%
Rate Range
Residential 1–9 Units
Property Type
CALCULATION METHOD
How DSCR Is Calculated
Debt Service Coverage Ratio (DSCR) measures a property's ability to cover its annual loan payments using its net operating income.
DSCR Formula
Monthly Net Rent
÷
Monthly PITIA
=
DSCR
DSCR Ranges
2.00+
Excellent coverage
1.50+
Strong
1.33
Borderline minimum in many programs
1.25
Typical minimum threshold
1.04
Usually declined
CALCULATOR
Estimate Your DSCR
Calculate your Debt Service Coverage Ratio instantly
2026 RATES
Current DSCR Loan Rates
Practical pricing ranges based on DSCR performance.
2.0+ DSCR
Excellent Profile
~5%–6%
1.5+ DSCR
Strong Profile
~5.5%–7%
1.25+ DSCR
Minimum Threshold
~6%–8%
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Note: Final pricing also depends on leverage, credit, reserves, and property type.
Bridge Loan Planning
Exit Strategies
How borrowers successfully exit bridge loans
Minimum
1.20x
Preferred
1.40x+
Higher DSCR improves approval strength, pricing, and leverage options.
Minimum
680
Preferred
720+
Stronger credit profiles receive better pricing and broader lender access
Minimum
20%
Preferred
25%–35%
Lower leverage improves approval strength and loan terms
Minimum
6 months
Preferred
12+ months
Liquidity reserves improve approval confidence and overall loan structure.
Minimum
Residential 1–4 units
Preferred
5–9 unit residential
Small commercial or mixed-use properties
Minimum
$150,000
Preferred
$250K– $2M
Loan size eligibility varies by property type and market
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Documents REQUIRED
Purchase contract or property address
Credit authorization form
Photo ID (driver's license)
LLC operating agreement (if applicable)
Property appraisal (ordered by lender)
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Documents NOT Required
W2s or 1099s
Personal tax returns (1040)
Business tax returns
Pay stubs or income verification
Employment verification
Bank statements for income
COMPARE
DSCR Loans vs Conventional Loans
See how DSCR loans compare to traditional mortgage financing.
Feature
DSCR Loans
Conventional Loans
Approval Basis
Property cash flow (DSCR)
Personal income and DTI
Income Verification
No personal income verification required
Full income and employment verification required
Documentation
Minimal, property-focused
Extensive, borrower-focused
Property Limits
No strict limit on financed properties
Typically limited to 10 properties
Rate Range
5%–8% typical
5.5%–7.5% typical
Ownership
LLC ownership allowed
Typically must close in personal name
Flexibility
Designed for real estate investors
Designed primarily for owner-occupants
Best Use Case
Rental property investing and portfolio growth
Primary residence or limited investment use
Overview
6 Ways to Improve DSCR
Key features of traditional commercial real estate financing for income-producing properties.
Long-Term Rentals
12-month leases, stable income, traditional residential investment properties
DSCR Range
1.25 – 1.60
Rate Range
5.50% – 7.25%
Advantages
Stable monthly income
Lower vacancy risk
Predictable cash flow
Most lender-preferred property type
Disadvantages
Lower yield compared to short-term rentals
Tenant turnover costs
Rent growth tied to market conditions
Less upside compared to value-add strategies
Short-Term Rentals
Vacation rentals, nightly bookings, seasonal income
DSCR Range
1.30 – 1.80
Rate Range
6.00% – 7.75%
Advantages
Higher income potential
Flexible pricing structure
Strong performance in high-demand markets
Opportunity for accelerated portfolio growth
Disadvantages
Higher vacancy volatility
Seasonal income fluctuations
More operational management required
Regulatory and licensing risks
Value-Add / Renovation
Acquire underperforming property, improve income, then refinance into permanent financing
DSCR Range
0.90 – 1.20 (initial) → 1.25+ (stabilized)
Rate Range
7.00% – 9.50% (bridge) → 5.75% – 7.25% (permanent)
Advantages
Forced appreciation potential
Equity creation through improvements
Higher long-term returns
Ability to refinance into lower-rate permanent debt
Disadvantages
Renovation execution risk
Temporary negative or weak cash flow
Higher capital requirements
Timeline and cost uncertainty
Portfolio Building
Acquire multiple rental properties using DSCR-based underwriting
DSCR Range
1.25 – 1.50 typical
Rate Range
5.75% – 7.25%
Advantages
Scale portfolio without traditional income limits
Qualification based on property cash flow
Flexible ownership structures (LLC eligible)
Efficient refinancing and expansion strategies
Disadvantages
Requires stronger liquidity and reserves
Larger capital commitments
Portfolio management complexity
Market and interest rate exposure
HOW IT WORKS
How to Get Revenue-Based Financing
From application to funding in 4 simple steps. Most businesses get funded within 1-2 weeks.
Pre-Qualification
Submit basic info, property address, and estimated rent. Lender reviews DSCR feasibility.
Property Selection
Find property with strong rental income. Run DSCR calculation to ensure it meets minimums.
Formal Application
Submit purchase contract, credit authorization, and property details. Lender orders appraisal.
Appraisal & Underwriting
Appraiser evaluates property and determines market rent. Underwriter reviews DSCR and approves.
Closing
Sign loan documents, wire down payment, receive keys. Total timeline: 21-30 days from application.
Common Questions
Frequently asked questions
Get answers to the most common questions about our financing platform and process.
Clear answers before you apply. No credit impact during pre-screening.
What types of businesses qualify for financing?
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We facilitate financing for businesses across all major industries and business structures. Qualification criteria vary by lender and product type, but generally include minimum revenue thresholds, time in business, and creditworthiness standards. Our advisors assess your specific situation to identify appropriate financing options.
What is the typical timeline from application to funding?
Preliminary decisions are typically delivered within 24 hours of completed application submission. Final approval and funding timelines vary by product type and lender requirements. Alternative financing products often fund within 3-7 business days, while SBA loans typically require 2-4 weeks due to government underwriting processes.
What credit profile is required for approval?
Credit requirements vary significantly by lender and product type. Traditional bank products typically require personal credit scores of 680 or higher, while alternative lending partners may approve businesses with scores as low as 600. We evaluate your complete financial profile to identify lenders aligned with your credit standing.
What fees does BestLoanUSA charge?
BestLoanUSA does not charge upfront application fees or consultation fees. Any fees associated with specific loan products are charged directly by the lending institution and are fully disclosed prior to loan acceptance. We maintain complete transparency regarding all costs throughout the process.
How do bank and non-bank lenders differ?
Traditional banks typically offer lower interest rates but maintain stricter qualification criteria and longer approval timelines. Non-bank lenders provide faster decisions with more flexible underwriting but may charge higher rates. Our platform provides access to both, allowing you to evaluate the full spectrum of available options.
What are the borrowing limits?
Available capital ranges from $10,000 to $10 million or more, depending on product type, business financial strength, and lender criteria. During the application review process, our advisors help determine appropriate loan amounts based on your stated needs and qualification parameters.
Ready to Get Started?
Access the capital your business needs
Comprehensive financing solutions backed by expert advisory guidance. One application, multiple lender options, transparent terms.
Secure & confidential
No credit impact
Advisor-led process
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