Glossary
Serviceability
Whether a business can pay a proposed debt back out of its own earnings, tested the way a credit team tests it, not the way a calculator guesses it.
In plain English
Serviceability is the lender's core question: can this borrower make the repayments on this facility, from real earnings, even when conditions tighten? For business lending it is answered by rebuilding the earnings from source documents, consolidating every existing commitment, and testing the proposed repayments at an assessment rate above the advertised one.
Serviceability is not a single number. It is the whole case: adjusted earnings, existing commitments, the new repayment schedule, the covenant ratios and the stress tests, all pointing the same way. When any one of those pieces is missing or unevidenced, applications that should pass get declined.
Why a lender cares
An assessor never takes the profit and loss at face value. They rebuild it, discount what cannot be evidenced, then test the debt at their rate. A submission that has already done that work, and shows it, is a materially easier approval. That is the whole reason our serviceability models exist.
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