accounting
Debt Service
Debt service is the total principal and interest payments a business owes on its existing debt over a period, usually expressed annually.
Last updated Reviewed by ICG Funding
Definition
What it means.
Debt service is the sum of every loan, line, and financing obligation’s scheduled principal and interest. Lenders look at it to calculate DSCR and total debt capacity.
Factor-rate products complicate debt service math because they do not have a conventional monthly payment. Convert their fixed daily ACH to a monthly equivalent before adding to the total debt service figure.
Now what?
Get an offer that accounts for debt service.
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