Loan Parameters
Results Summary
Minimum DSCR Achieved
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Average DSCR--
Total Interest--
Scheduled Principal--
Weighted Avg Life--
Balloon Amount--
Repayment Method Comparison
| Method | Min DSCR | Total Interest | WAL | Balloon |
|---|---|---|---|---|
| Calculating... | ||||
Level and Annuity methods always fully amortize (no balloon).
Debt Service Schedule
Repayment Schedule
| Period | Year | CFADS | Debt Service | Interest | Principal | Balance | DSCR |
|---|---|---|---|---|---|---|---|
| Calculating... | |||||||
Understanding Debt Sculpting
What Is Debt Sculpting?
Debt sculpting is a project finance technique where principal repayments are structured to match the project's expected cash flow profile. Rather than using fixed equal payments (annuity) or fixed equal principal (level), sculpted repayments vary each period to achieve a target Debt Service Coverage Ratio (DSCR).
Sculpted vs Level vs Annuity
Level: Principal divided equally; debt service decreases over time. Annuity: Total debt service stays constant; principal increases. Sculpted: Principal varies to target specified DSCR based on available cash flow.
Model Assumptions: Simple nominal interest (annual rate / periods). Cash flows at period end. Tax effects pre-baked into CFADS. Grace period interest paid currently.
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Frequently Asked Questions
Debt sculpting calculates target-driven principal repayments matching your project's cash flow profile. This calculator amortizes a fixed debt amount by varying principal payments to achieve a target DSCR each period.
In level repayment, principal is paid equally each period while interest decreases. In annuity repayment, total debt service stays constant. In sculpted repayment, principal varies each period to target a specified DSCR.
Lenders typically require DSCR between 1.25x and 1.50x, but requirements vary significantly by sector, risk profile, contracted vs merchant revenue, jurisdiction, and tenor.
A grace period is typically used during construction or ramp-up when operating cash flows are limited. In this calculator, interest is paid currently during the grace period (not capitalized).
Two scenarios: (a) CFADS less than interest means principal = 0 and DSCR falls below 1.0. (b) If cumulative CFADS can't fully amortize, a balloon payment remains at maturity.
More frequent payments spread debt service across more periods. Both semi-annual and quarterly frequencies are common in project finance.
Weighted Average Life measures the average time to repay principal, weighted by amount. Lower WAL generally means faster repayment and less total interest. This calculator includes any balloon at maturity.
