Fixed charge coverage ratio (FCCR)

Definition

Cash flow measured against every fixed obligation, not just the debt.

Why It Matters

Some lenders underwrite to this stricter test instead of plain DSCR, folding in fixed obligations like lease payments and owner draws that DSCR leaves out. A deal that clears one ratio can fail the other, so ask which test your lender uses before you build an offer around a coverage number.

In numbers: A business with $600k of cash flow against $360k of debt service and a $180k lease shows a 1.11x FCCR.