Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Oct 21, 2021

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Our debt-to-assets calculations are designed to help prospective borrowers find out whether or not they’ll be considered a good applicant for a small business loan.

When lenders look at an applicant’s credentials, one of the most important influential factors is a borrower’s existing debt. If a lender gives money to a borrower with a high amount of debt, that lender’s money is at greater risk since the borrower has multiple payments to juggle.

However, the actual dollar amount of outstanding debt isn’t always an accurate depiction of a company’s financial health. For instance, if a business has valuable assets, those assets can offset their outstanding debt. That’s why small commercial loan applicants need to make use of a debt-to-assets calculator.

For instance, if you have $25,000 in debt for assets valued at $55,000, your debt-to-assets ratio would be 45 percent. That means that 45 percent of your assets of your assets are still “owned” by lenders you owe money to.

Another way of thinking about that ratio is for every dollar you’ve spent on acquiring assets, lenders have put 45 cents into those purchases.

A higher debt-to-assets ratio is worse than a lower ratio in terms of qualifying for a small business loan since higher ratios are telling of less equity and more debt. If this debt-to-assets calculator reveals a lower ratio, you should be more confident in your likelihood to be approved for a commercial loan.

If you would like to apply for a business loan after discovering your debt-to-assets ratio, fill out the application that will appear below the calculated results.