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What is a good DSCR?

A good DSCR signifies that a person or company has sufficient cash flow to cover debt obligations. Generally, a DSCR above 1 means there is enough cash flow to cover ongoing debt payments, while anything below this number may suggest the opposite. If a company or individual has a DSCR ratio of 1.2 or higher, then it indicates that they have plenty of excess cash flow after servicing their debt obligations; this is an ideal situation for lenders to be in since it indicates strong creditworthiness.