Every Term Your Bank Uses — Explained
DSCR, CMA Data, MPBF, TOL/TNW, CGTMSE, FACR, NPA — banks evaluate your proposal using ratios and metrics most MSME owners never encounter in daily business. This glossary explains every term in plain language, with Karnataka context.
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DSCR — Debt Service Coverage Ratio
Financial RatiosNet Cash Accrual (Net Profit After Tax + Depreciation + Interest on Term Loan) divided by Debt Service (Principal Repayment + Interest on Term Loan). DSCR measures whether the business generates enough cash to service its debt obligations. Most PSU banks require a minimum average DSCR of 1.25 across the repayment period for MSME term loans, with 1.5 being the preferred threshold. A DSCR below 1.25 in your CMA projections will typically result in rejection.
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MSME Central prepares DPRs and CMA data that meet every ratio threshold banks require — and submits them to the right bank desk in Bengaluru and Karnataka.