What Is Your Interest Times Coverage?

What Is Your Interest Times Coverage?

What Is the Interest Coverage Ratio?

The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company can pay interest on its outstanding debt.

The interest coverage ratio may be calculated by dividing a company’s earnings before interest and taxes (EBIT) during a given period by the company’s interest payments due within the same period.

The Interest coverage ratio is also called “times interest earned.” Lenders, investors, and creditors often use this formula to determine a company’s riskiness relative to its current debt or for future borrowing.

How easily are you able to re-pay your interest payments?

Your ITC ratio will have a major impact on the amount you can borrow when deciding to purchase a Rent Roll.

As this ratio varies between each bank, having a Finance Broker navigate the best possible lender for you is paramount.

It’s critical when purchasing a Rent Roll that you consider all your lending options rather than just going back to your existing lender.

With recent changes in the financial industry and market shifts, the historic Rent Roll funders are sometimes not as competitive or your best option.

And that’s why speaking with an experienced Rent Roll finance broker will help take all the hard work out of finding you the best lender.

Josh McKay, Director at JCM Finance, discusses what banks are looking for and how utilising an experienced finance broker can help you obtain the best interest rate for your business whilst avoiding the time consuming process of dealing with the bank directly.

To arrange a free and confidential consultation with Josh to discuss your financial options, click the button below.

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