Debt Capacity Calculator

Debt capacity is the amount of debt a health center can afford to take on, given its historical or projected financial position. Utilizing the calculator below, you will get a preliminary estimate of debt capacity and better understand the "gap" that may need to be funded through equity contributions and/or a capital campaign in order to complete a capital project.

Instructions: Input your most recent and/or anticipated audited financial information into the yellow cells below and click "Calculate".

Please note that both Interest Expense (current interest payments on long-term debt) and Rent Rebate/Savings (current rent/leasing payments that could be applied to a new facility’s cost) are significant variables in a debt capacity calculation. Contact us to learn about having a more comprehensive debt capacity sensitivity analysis prepared.

 

Debt Capacity Sensitivity Analysis
 Year 1Year 2Year 3Year 4
Change in Net Assets
Add: Total Depreciation
Add: Interest Expense
Funds Available for Debt Service
Add Rent Rebate/Savings
Total Funds Available for Debt Service
Debt Service Coverage discount (1.25)
 
Interest Rate
Term (years)
Debt Capacity
 
Interest Rate
Term (years)
Debt Capacity
 
Interest Rate
Term (years)
Debt Capacity
 
 

 

This estimate, which includes your health center's existing debt, is based on your historical financial performance, and as such, provides a starting place to consider your possible future debt capacity. To the extent you expect your operations to change as a result of your capital project, you should also prepare multi-year detailed financial projections for your health center, and then run the same calculation to determine the feasible level of debt your projected operations can carry. Capital Link can help you prepare these projections and assist you in determining an optimal financing mix for your project. To learn more about these services, contact us.

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