Lender Financing: It’s a Balancing Act

"Also, we look at the company's liquidity (cash, credit line availability) to see if it has the ability to support any short-term cash flow problems, and its leverage (debt to tangible net worth) to understand its ability to survive should the economy and industry continue to remain weak."

Quirk feels the two most prominent benchmarks lenders use are the Debt Service Coverage Ratio (DSCR) and Senior Debt/EBITDA, which paint an accurate picture of a printer's ability to take on added debt. DSCR should be greater than 1.0x, she says, with the new debt calculated into the ratio.