2 min read
Definition
Serviceability is whether a business generates enough regular cash to "service" its debt — to meet the repayments as they fall due, with a cushion. It is the practical question behind affordability and is measured through cover ratios like the DSCR.
Why it matters
A loan can be within your credit limit yet still not serviceable if the cash is not there. Serviceability, not the headline amount, is what keeps repayments met. See loan affordability and checking affordability.
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