Why commercial loan sizing uses two tests
Commercial real estate lenders commonly evaluate both collateral value and property cash flow. The LTV test limits the loan to a percentage of property value. The DSCR test limits annual debt service to the amount supported by NOI at the selected coverage ratio.
This tool estimates both limits and displays the lower amount as the illustrative maximum. The lower result is labeled as the binding constraint.
What can change the actual loan amount
Actual underwriting may use a different property value, qualifying NOI, interest-rate floor, amortization, DSCR requirement, or LTV cap. It can also consider borrower experience, liquidity, credit, property condition, tenant concentration, leases, and market trends.
Use the estimate to frame a conversation and assemble documents—not as a commitment or approval.
Frequently asked questions
Why is the lower limit used?
A loan generally must satisfy both the modeled LTV and DSCR constraints.
Can the result exceed the property value?
The LTV input limits the collateral-based amount to the selected percentage of value.
Is this a prequalification?
No. It is an educational estimate and not a credit decision or commitment.