DentiPath Tools
Practice Loan Capacity Calculator
Work backward from cash available for debt service to an illustrative payment and principal. This is different from calculating the payment on a known loan.
Enter decimals with a period. Commas can separate thousands.
What this estimates
The calculator divides annual cash available for debt by the target coverage ratio, then converts that payment capacity into an illustrative loan principal using the entered rate and amortization.
Formula or method
Maximum annual debt service equals cash available divided by the coverage target. Loan capacity is the present value of the resulting monthly payment at the entered rate and term.
Worked example
If $300,000 is available for debt service and the target coverage ratio is 1.35, the maximum annual payment in the model is about $222,222. The supported principal then depends on rate and amortization.
Inputs explained
- Normalized annual cash flow available for debt.
- Coverage target used for your screening scenario.
- Illustrative interest rate and amortization.
Common mistakes
- Using revenue instead of cash available for debt service.
- Ignoring lender adjustments and stress tests.
- Assuming a longer amortization makes the purchase economically sound.
- Treating capacity as approval.
Use the related guide: How Dental Practice Loans Affect Owner Cash Flow.
Model debt with the operating scenario.
Finance connects debt capacity with the rest of the practice scenario instead of evaluating a loan in isolation.
Questions
Does this tool send my numbers anywhere?
No. The current calculator runs locally in your browser. Values are not transmitted to DentiPath or saved to an account.
Is this professional advice?
No. It is an educational scenario model. Verify important decisions with qualified professionals and the original documents.
What is a debt-service coverage ratio?
It compares cash available for debt service with required debt payments. Definitions and required levels vary by lender and transaction.
Is this a lending pre-approval?
No. Lenders apply their own underwriting, security, covenants, adjustments, and borrower assessment.
Methodology and sources
How this tool produces its result
Method
Estimate debt capacity from a disclosed DSCR definition, adjusted cash flow, rate, amortization, taxes, distributions, and capital needs.
Boundaries to verify
Lender formulas and approval thresholds vary. The result is an educational financing scenario.
Official sources
- Debt service coverage ratio Business Development Bank of Canada
- How a bank looks at your business Business Development Bank of Canada
- Interest rate risk Financial Consumer Agency of Canada
- Posted interest rates offered by chartered banks Bank of Canada
Privacy guidance
Use deidentified financial totals only. Exclude patient names, chart numbers, birth dates, insurance identifiers, and clinical details.
This calculator is for educational scenario modelling. It is not a lending pre-approval, credit decision, valuation, forecast, or financial, legal, tax, accounting, or investment advice.