You're looking to borrow money. You want to build a lawnmower racing track in your back yard and need money to build it, and to run it until you turn a profit. (You're in talks now for a TV deal with CBS Sports Net...you're hoping to replace competitive fishing in their Saturday lineup, but won't know for another few months).
Loan Life Coverage Ratio provides one method potential lenders will use to estimate how likely you are to repay the debt. It represents a solvency ratio that tests how well you'll be able to repay your debts over the length of a project.
The ratio involves taking the net present value of cash available to service and dividing that by the amount of debt over the course of the period in question.
In contrast to other solvency ratios, LLCR takes a long view. It doesn't just look at the current ability to pay, but takes into account the full course of the project.