Tools/Business Debt Ratio Calculator
Business Debt Ratio Calculator
See how leveraged your business really is - and how much borrowing headroom you have before lenders get cautious.
Balance Sheet Inputs
A debt ratio below 50% signals a balance sheet with room to borrow; above 65% most lenders price cautiously.
Debt ratio
33.3%
Assessment
Healthy
Borrowing headroom
₹2 Cr
To stay within 50%
125+ lenders. Termsheet in 48h. Zero equity dilution.
How the debt ratio is calculated
Debt ratio = total debt ÷ total assets. It answers one question: how much of your business is funded by borrowed money? A ratio of 40% means lenders fund 40 paise of every rupee of assets, and equity funds the rest.
In India, lenders generally read below 50% as healthy, 50-65% as manageable, and above 65% as stretched. A lower ratio does not just mean safety - it means untapped, cheap borrowing capacity you could be using to grow.
Explore Working Capital LoansWhat is a business debt ratio calculator?
A business debt ratio calculator divides your total debt (short-term plus long-term borrowings) by your total assets to show your leverage as a percentage. It is one of the first ratios every lender computes when your loan file lands on their desk.
Knowing your ratio before you apply lets you position the application correctly - and tells you whether to fix the balance sheet first or borrow with confidence.
How to use this debt ratio calculator
- 1
Enter your total debt - all loans, overdrafts, and borrowings, short and long term.
- 2
Enter your total assets from your latest balance sheet.
- 3
Read your debt ratio, health assessment, and the extra borrowing headroom that keeps you inside the healthy zone.
What your debt ratio means to a lender
Below 50% - healthy
You have meaningful borrowing capacity. Lenders compete for this profile, which means better pricing.
50-65% - manageable
Borrowing is still possible, but expect more diligence on cash flows and possibly higher rates.
Above 65% - stretched
Most lenders price cautiously or ask for collateral. Consider repaying expensive debt before adding more.
Debt mix matters too
Two businesses with the same ratio get different terms - cheap, long-tenure debt reads far better than expensive short-term borrowings.