A hypothetical B2B SaaS scaleup has total monthly revenue of $150,000.
Its operating expenses, including salaries, R&D costs, marketing, and general administrative and operating expenses, total $60,000.
So the scaleup’s monthly net operating income is $90,000.
The business is already paying off debts totalling $35,000 per month, including interest payments, and is considering applying for another loan product that will require repayment of $75,000 over three months – or $25,000 per month.
This gives the startup a monthly debt service cost of $60,000.
Dividing the net monthly operating income ($90,000) by the monthly debt service costs ($60,000), gives it a DSCR of 1.5.
For most loan companies, this would likely be enough to suggest it can repay all of its loan obligations comfortably.
How Tractor can help
DSCR is a considering for Tractor, as part of our investment committee decision-making process. However, we understand how technology companies grow and scale using revenue, so we factor in the needs of individual businesses too.
Even so, it can be helpful for business owners and founders to know where they stand when thinking about any debt funding.
Tractor loans are designed to be transparent and flexible. And repayments are also linked to revenue, meaning a slow month is less likely to leave your business in a tough situation.
If you’re ready to learn more about how a Tractor loan could work for you, take a look at our business loan repayments calculator - and start your application here.
We'd love to chat and see whether Tractor is the best partner for you.
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