Property-level DSCR tells you whether this deal covers this loan. It says nothing about the borrower who signed twelve other guarantees, carries three construction loans in lease-up, and pulls living expenses from the same cash flows. Global cash flow analysis answers the question committees actually care about: does this borrower, across everything they own and owe, generate enough cash to survive a problem? Here is how lenders build it.
Global cash flow (GCF) aggregates all of a borrower’s and guarantors’ cash-generating activities — every property, every business interest, personal income — and measures them against all obligations: every mortgage payment, guarantee exposure, business debt, and personal debt service. The output is a global DSCR: total cash available for debt service divided by total debt service. Property DSCR underwrites the deal; global DSCR underwrites the person standing behind it.
Four documents drive the analysis. The personal financial statement establishes claimed assets, liabilities, and income — the starting claim to verify, not the answer. The schedule of real estate owned (SREO) lists every property with its income, debt service, and the borrower’s ownership percentage — this is where the portfolio actually lives. Personal and entity tax returns (with K-1s) verify what the PFS claims and reveal what it omits. And bank and brokerage statements verify liquidity. When the PFS and the tax returns disagree — and they often do — the tax returns win.
The mechanics are a property-by-property build. For each SREO entry: gross income, operating expenses, NOI, and debt service, at the borrower’s ownership share. Add business cash flow from K-1s — distributions actually taken, not pass-through paper income — and W-2 or other personal income. Subtract personal debt service and a realistic living-expense figure. What remains is global cash available for debt service, set against global debt service including the proposed new loan. The discipline is in using cash figures, not taxable-income figures: depreciation added back, but phantom income and one-time gains stripped out.
Anyone can total an SREO. The underwriting is in the adjustments. Haircut distributions from entities the borrower doesn’t control — minority interests can stop distributing at exactly the wrong time. Stress properties with near-term maturities at refinance rates, not in-place rates. Zero out cash flow from properties in lease-up or construction; they consume cash until proven otherwise. Add contingent liabilities: completion guarantees and full-recourse exposure on other loans can convert to real obligations overnight. And test concentration — if one property or one tenant produces most of the global cash flow, the global number is weaker than it looks.
Convention varies by shop, but most credit policies want a global DSCR of 1.20x–1.25x or better, alongside minimum liquidity (commonly 6–12 months of global debt service) and net worth relative to total exposure. The ratio matters less than the trajectory and the cushion: a 1.40x borrower with staggered maturities and real liquidity is a different credit than a 1.40x borrower with three balloons in eighteen months and equity locked in illiquid positions.
A well-built GCF schedule reliably exposes the problems a PFS conceals: borrowers living on refinance proceeds rather than operating cash flow; guarantee exposure that exceeds net worth; a portfolio where every property clears 1.0x but the whole barely covers after personal obligations; and liquidity that exists on paper but sits in entities the borrower cannot reach. These are precisely the files that look fine at the property level and default at the borrower level.
Global cash flow is the most labor-intensive part of borrower credit underwriting — tax-return spreading, SREO verification, entity-by-entity adjustments. It is also the part most shops skip under deal pressure, which is exactly when it matters. We build full borrower credit packages — PFS and SREO analysis, verified liquidity, global cash flow, contingent liabilities, and the credit memo — as an outsourced underwriting service for lenders, with a published sample memo so you can see the depth before sending a file.
15 minutes to discuss your deal, your file, or your portfolio. Honest assessment of fit — and if we’re not the right firm, we’ll tell you.
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