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Debt Covenant Cure Cost Calculator

Breaching a DSCR or LTV covenant triggers default — quantify the equity cure required.

Current NOI (annual)

Annual debt service

Required DSCR

Loan balance

Loan rate %

Cash cure required

$1,142,857

EBITDA cure required

$100,000

Current DSCR

1.15

How the math works

EBITDA cure = NOI gap. Cash cure = debt service reduction needed / loan rate.

$1M × 1.25 = $1.25M required NOI − $1.15M = $100k EBITDA cure. Cash cure ≈ $100k/0.07 = $1.43M.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Debt Covenant Cure Cost Calculator is built to give a quick, browser-based estimate for debt covenant cure cost. Breaching a DSCR or LTV covenant triggers default — quantify the equity cure required. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the debt covenant cure cost result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this debt covenant cure cost estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter current NOI.
Enter annual debt service.
Enter required DSCR covenant.
Enter current loan balance.
Enter equity cure EBITDA multiple.
Read cure amount required.

Frequently Asked Questions

What is a covenant cure?

When a borrower breaches a financial covenant (DSCR, debt yield, LTV, leverage ratio, EBITDA-based), most credit agreements allow an equity cure — sponsor injects fresh equity, which either (a) reduces debt (cash cure), (b) is deemed to add to EBITDA for covenant compliance (EBITDA cure), or (c) replaces missing cash flow. Cure right typically 2-4 uses over loan life, max once per test period.

Cash cure vs EBITDA cure?

Cash cure: equity paid to reduce principal → lower debt service → higher DSCR next test. Clean but expensive (full paydown). EBITDA cure: equity added synthetically to EBITDA in covenant calc for that test period only. Cheaper (only covers the shortfall) but controversial; many credit agreements prohibit. Modern liquidity-focused loans use cash cure only.

Sizing the cure?

DSCR breach: cure = shortfall below covenant, annualized and translated to principal paydown. Example: current DSCR 1.15, covenant 1.25, debt service $1M → required NOI $1.25M, actual NOI $1.15M, $100k gap. Cash cure = $100k/loan rate = ~$1.4M principal paydown at 7%. Equity cure (EBITDA) = $100k only. Huge difference, dictates structure.

After cure?

Covenant complied-with at test date. Borrower remains in default for notice purposes but cured. Most agreements: successful cure = no event of default, no acceleration, no default interest, no cross-default. Failed cure: acceleration, cross-default, DIP financing discussion. Lender may charge cure fee (0.5-2% of loan) and require additional reporting. Cure events limited to prevent serial abuse.