what is the loan life coverage ratio llcr 
the loan life coverage ratio llcr is a financial ratio used to estimate the solvency of a firm or the ability of a borrowing company to repay an outstanding loan llcr is calculated by dividing the net present value npv of the money available for debt repayment by the amount of outstanding debt llcr is similar to the debt service coverage ratio dscr but it is more commonly used in project financing because of its long term nature the dscr captures a single point in time whereas the llcr addresses the entire span of the loan the formula for the loan life coverage ratio llcr is t s s n c f t 1 i t d r o t where c f t cash flows available for debt service at year t t the time period year s the number of years expected to pay the debt back i the weighted average cost of capital wacc expressed as an interest rate d r cash reserve available to repay the debt the debt reserve o t the debt balance outstanding at the time of evaluation begin aligned frac sum t s s n frac cf t left 1 i right t dr o t textbf where cf t text cash flows available for debt service at year t t text the time period left text year right s text the number of years expected to pay the debt back i text the weighted average cost of capital left text wacc right text expressed as an interest rate dr text cash reserve available to repay the debt left text the debt reserve right o t text the debt balance outstanding at the time of text evaluation end aligned ot t ss n 1 i tcft dr where cft cash flows available for debt service at year tt the time period year s the number of years expected to pay the debt backi the weighted average cost of capital wacc expressed as an interest ratedr cash reserve available to repay the debt the debt reserve ot the debt balance outstanding at the time ofevaluation 