How to reflect the loan body in the financial model
Posted: Tue Jan 07, 2025 10:03 am
When creating a financial model, you need to divide the loan into two parts: payment of the principal debt and interest.
The payment of the principal debt will be reflected in the investment cash flow, while the interest should be taken into account in the operating cash flow. Important: the interest on the loan affects the net profit and is reflected below EBITDA.
Obviously, if there is no net profit even in the plans, then nigeria telegram there can be no talk of a loan. A cash gap is looming - solve this issue on the shore. Take off your rose-colored glasses and recalculate several scenarios, and then put them back on. The risks must be manageable.
Read also: Factoring and forfaiting: comparison and differences
How to find funds for development without a loan
First, it's worth looking inside the business. What can be done:
refusal of advance payments to counterparties;
purchase only from suppliers with the possibility of deferment;
we carry out temporary optimization of expenses;
We are temporarily limiting the withdrawal of dividends;
we free up cash (we analyze assets: stale materials, overdue accounts receivable, illiquid fixed assets).
If you are starting from scratch, then it is worthwhile to optimize costs at the start. For example, you can avoid registering an LLC or individual entrepreneur, and resort to self-employment. Instead of a staff of employees, you can hire freelancers. Invest the saved personal funds. Of course, you should not expect rapid growth.
If you have the opportunity to borrow money for business from relatives or friends, then go ahead. For large amounts, you will need to draw up an agreement.
You can use such business support measures as grants and subsidies. I will tell you about several more tools for attracting funds.
Crowdfunding
Special platforms where you can raise funds. Crowdfunding helps not only to get money (minus the commission), but also to make a name for yourself and find out public opinion. Sponsors can send funds as a donation or for rewards.
The payment of the principal debt will be reflected in the investment cash flow, while the interest should be taken into account in the operating cash flow. Important: the interest on the loan affects the net profit and is reflected below EBITDA.
Obviously, if there is no net profit even in the plans, then nigeria telegram there can be no talk of a loan. A cash gap is looming - solve this issue on the shore. Take off your rose-colored glasses and recalculate several scenarios, and then put them back on. The risks must be manageable.
Read also: Factoring and forfaiting: comparison and differences
How to find funds for development without a loan
First, it's worth looking inside the business. What can be done:
refusal of advance payments to counterparties;
purchase only from suppliers with the possibility of deferment;
we carry out temporary optimization of expenses;
We are temporarily limiting the withdrawal of dividends;
we free up cash (we analyze assets: stale materials, overdue accounts receivable, illiquid fixed assets).
If you are starting from scratch, then it is worthwhile to optimize costs at the start. For example, you can avoid registering an LLC or individual entrepreneur, and resort to self-employment. Instead of a staff of employees, you can hire freelancers. Invest the saved personal funds. Of course, you should not expect rapid growth.
If you have the opportunity to borrow money for business from relatives or friends, then go ahead. For large amounts, you will need to draw up an agreement.
You can use such business support measures as grants and subsidies. I will tell you about several more tools for attracting funds.
Crowdfunding
Special platforms where you can raise funds. Crowdfunding helps not only to get money (minus the commission), but also to make a name for yourself and find out public opinion. Sponsors can send funds as a donation or for rewards.