What is DSCR and ISCR and what's the importance of it

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DSCR stands for Debt Service Coverage Ratio and ISCR stands for Interest Service Coverage Ratio. They are financial ratios used to assess the ability of a borrower to meet their debt obligations.

DSCR measures the cash flow available to cover debt payments, while ISCR measures the cash flow available to cover interest payments.
Both ratios are important for lenders and investors to evaluate the creditworthiness and risk of a borrower.
A higher DSCR or ISCR indicates a stronger ability to meet debt or interest payments, respectively.
For example, a DSCR of 1.5 means that the borrower's cash flow is 1.5 times the amount of their debt payments.
Lenders typically require a minimum DSCR and ISCR to ensure the borrower can comfortably meet their obligations.

What is DSCR and ISCR and what's the importance of it

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