Calculator
Debt capacity of a company
The calculator applies three methods to your figures: an EBITDA multiple, debt service coverage and the repayment benchmark of the European Central Bank.
New debt capacity
€40.7m
The binding total debt is €70.7m (3.54x EBITDA). Existing net debt is deducted from it.
| Method | Total debt | Leverage |
|---|---|---|
| EBITDA multiple | €72.0m | 3.60x |
| Debt service coverageBinding method | €70.7m | 3.54x |
| 50% repayment over the term | €128.6m | 6.43x |
Cash flow available for debt service: €14.0m. This calculation gives an order of magnitude and commits no lender.
Method
The three calculation methods
Available cash flow equals EBITDA less maintenance capex and tax paid. The binding capacity is the lowest of the three debt amounts. The third method applies the European Central Bank benchmark: repay at least 50% of total debt within five to seven years.
EBITDA multiple
Total debt = target leverage × EBITDA
Debt service coverage
Total debt = (available cash flow ÷ target DSCR) × present value of an annuity over the loan term
50% repayment over the term
Total debt = term × available cash flow ÷ (0.5 + term × rate)
Example
Worked example
A company generates €20.0m of EBITDA, spends €3.0m on maintenance capex, pays €3.0m of tax and carries €30.0m of net debt. Its available cash flow reaches €14.0m. The EBITDA multiple gives €72.0m of total debt, debt service coverage gives €70.7m and 50% repayment over seven years gives €128.6m. The binding total debt is €70.7m (3.54x EBITDA). The new debt capacity stands at €40.7m.
Contact
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Sources
- Banque centrale européenne, Guidance on leveraged transactions, mai 2017
- Banque de France, Financement des entreprises, août 2026, publication du 8 octobre 2026
- France Invest et EY, Création de valeur dans les PME et ETI françaises accompagnées par les acteurs français du capital-investissement, 11e édition, millésime 2024