Lenders commonly use this metric to evaluate a borrower's creditworthiness and the potential risk associated with a loan. The DSCR can be helpful for investors to assess a property's financial stability and its potential for generating positive cash flow. Internal Rate of Return (IRR):The Interna...
Debt-service coverage ratio (DSCR):Lenders use this equation to determine whether your business has enough net operating income to pay back a loan. A simplified calculation is ‘net operating income divided by total debt service.’ A DSCR of 1.00 typically means that your business has just enou...
Inventory financing is a short term loan or line of credit that is used by a business to purchase inventory. The loan or line of credit is typically secured by existing inventory, and sometimes, by an additional lien on other business assets. ...
This is why it is critical to understand the risk profile of each CMBS loan, based on location, property quality, borrower dynamics, loan structure, etc. However, that’s only one piece of the puzzle since investors must also have a strong understanding of the CMBS bond structure, in ...