LLCR & PLCR Calculator
Loan life and project life cover ratios, with every step of the present value working shown. Where DSCR is a single-period snapshot, these are whole-of-life measures — far less sensitive to one bad year, and the ratio lenders lean on when assessing a restructuring.
The calculation
The discount rate r is the loan's own periodic rate — not a WACC and not a cost of equity. The question LLCR asks is whether these cash flows can carrythis debt, so the debt's own rate is the internally consistent choice.
Why the DSRA nets off
Cash sitting in the debt service reserve is already available to repay lenders, so the standard formulation measures cover against debt net of it. Using gross debt understates the ratio. The net debt figure is shown explicitly above so the effect is visible rather than buried.
The tail, and what PLCR adds
The tail is the period between debt maturity and the end of the project's economic or contractual life. Lenders require one so there is a recovery window if the project underperforms and the debt has to be extended. PLCR captures it; LLCR does not. The ratio between them is a direct measure of how much protection the tail provides.
The identity worth knowing
On a structure sculpted to a flat DSCR, LLCR equals the DSCR target exactly, in every period. That falls out of the algebra rather than being a coincidence — the derivation is on themethodology page. If your own model shows LLCR drifting away from DSCR on a flat sculpt, the model has a bug, and the usual cause is a mismatch between the discount rate and the interest accrual rate.
Frequently asked questions
What is LLCR?
LLCR — the loan life cover ratio — is the present value of CFADS over the remaining loan life, divided by the debt outstanding at that point, net of any debt service reserve. Where DSCR measures a single period, LLCR measures the whole remaining life of the loan in one number.
What is the difference between LLCR and PLCR?
They use the same formula but a different CFADS window. LLCR discounts cash flows only to debt maturity; PLCR discounts them to the end of the project's economic life. PLCR is always the higher of the two when the project outlives the debt, and the gap between them is the value of the tail.
Should the DSRA be deducted from debt in the LLCR calculation?
Yes, in the standard formulation. Cash sitting in the debt service reserve is available to repay lenders, so it nets against gross debt. Using gross debt instead understates the ratio — this calculator shows net debt explicitly so you can see the effect.
What discount rate should be used for LLCR?
The loan's own interest rate, not a WACC or a cost of equity. LLCR asks whether the cash flows can service this debt, so the debt's rate is the internally consistent discount rate. Using a higher rate understates the ratio and is not standard practice.