ability to pay


A borrower's capability of meeting his/her current and future debt obligations.

Use ability to pay in a sentence

We were confident in their ability to pay, so we had no issues extending the debt limit a little further as a result.

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It was a very profitable quarter, so the small company's ability to pay all of the invoices that were currently due was not a problem.

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The bank had always been comfortable loaning money to the Parallax Corporation in the past but given the current economy and recent financial upheaval, they now started to wonder about the company's ability to pay their debts.

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EBITDA / interest coverage ratio A.M. Best