Any reputable funder, be it a CDFI, a bank, or an alternative lender needs to see one thing above all else before agreeing to refinance existing debt: proof that the new arrangement is affordable.
That proof comes from a properly prepared set of integrated financial forecasts, not a single spreadsheet showing hoped-for sales, but a connected model that shows how the whole business will perform once the new funding structure is in place.
An integrated forecast links together the three core financial statements so that they tell one consistent story:
trading performance, margins, and profitability.
The financial position of the business over time, including the new debt replacing the stacking loans.
The practical test of affordability: whether the business generates enough cash, month by month, to meet its obligations, including the restructured repayments.
(Cash Flow available for Debt Service) and DSC (Debt Service Cover) statements are then derived to prove that the funding structure fits within the lenders parameters.
Strata prepares integrated forecasts for every client as a core part of the funding proposal. These are prepared by our “in house” Chartered Accountant using pre approved spreadsheets favoured by CDFI lenders. These forecasts are built to:
Show clearly how the restructured facility will be repaid from normal trading cashflow.
This should incorporate the removal of the old, expensive stacked loans and their replacement with the new, lower-cost structure.
Make sure assumptions are realistic, evidenced, and clearly explained.
The funding proposal needs to give CDFIs and other funders the confidence to lend.
We can work with forecasts prepared by yourselves or your accountants, but would prefer to use these as our input data rather than go back and forth to your accountant for multiple amendments.
Every forecast starts from your actual trading history and current position, adjusted to reflect:
The consolidation of existing stacked loans into the new facility
Any Time to Pay arrangement in place with HMRC
Realistic, achievable trading assumptions going forward
Any planned ancillary funding, such as invoice finance or credit lines, where relevant
The result is a forecast a funder can trust and a foundation your business can actually build on.
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