Financing the Deal: Why the Debt Service Coverage Ratio Matters
A typical commercial real estate lender receives dozens of new loan requests each month. As such, it is necessary to have a mechanism to filter through the deals to identify which ones have the best chance of being repaid. One of the ways that lenders do this is through the use of a metric called […]
What is the Debt Service Coverage Ratio?
Nearly all commercial real estate transactions are financed with some combination of debt and equity. The equity comes from the potential property owner and/or their investors while the debt comes from a bank or non-bank lender. The exact amount of each can vary by transaction, but equity typically consists of 15% – 25% of the […]