Reserve accounts
Debt service reserve and maintenance reserve.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: reserve accounts.Updated 30 September 2026
What it does
Two cash trays that fill before equity sees anything. The debt service reserve holds a set number of periods of forward debt service, funded at commercial operation and adjusted each period as service changes, and is released as the loan runs off. The maintenance reserve is funded steadily against a calendar of major-maintenance events and drawn when they fall, so a lumpy cost does not breach coverage in the period it lands.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, row 36: Major maintenance calendar (1 in the period it falls)
- Waterfall, rows 11–14: Target: forward debt service, Opening balance, Funding / (release), Closing balance
- Waterfall, rows 17–23: Operating period (1), Opening balance, Funding, each period (limited to the cash there is), Major maintenance paid from the reserve…
What a reviewer looks for
- Reserves omitted, overstating early distributions.
- The DSRA sized on backward rather than forward service.
- Maintenance paid from CFADS and also from the reserve.
Learn it, then build it
Vocabulary: Debt Service Reserve Account (DSRA).