Debt Capacity & Leverage Stress Simulator

A leverage ratio that looks comfortable today can look very different after a genuine downside quarter. See exactly how much cushion actually exists before a covenant gets threatened.

Reading This Tool

How To Use This Simulator

Enter current EBITDA, existing debt, interest rate, and a downside scenario to stress against.

The gauge shows leverage under the stress scenario against a typical covenant ceiling, so you can see cushion, or the lack of it, before a lender ever raises the question.

Your Inputs

Current Annual EBITDA $3,000,000

Existing Total Debt $9,000,000

Average Interest Rate 7.0%

Stress Scenario: EBITDA Decline 25%

Covenant Maximum Leverage 4.0x

Interest coverage here is simplified to EBITDA over annual interest expense on existing debt, a full debt service coverage calculation would also include scheduled principal repayments.

Stressed Leverage

Current Leverage

0.0x

Stressed Leverage

0.0x

Interest Coverage Under Stress

0.0x

Stressed Leverage Against Covenant Ceiling

This is a simplified illustration. Actual lender covenants often define EBITDA, debt, and coverage ratios with specific adjustments that can differ meaningfully from this general model.

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