Capital planning / 3 minute read
A funding plan that fits the decision.
Look beyond the amount you need. Consider when the spending creates value, how repayment will be funded and what happens if the timetable changes.
Begin with the outcome
Describe what the money should achieve before comparing facilities. Seasonal inventory and a long-lived asset create different requirements. A defined purpose helps establish the amount, duration and likely repayment source.
Put cash flow on the calendar
Identify when spending happens and when money becomes available to repay it. Customer collection dates matter for businesses; income after regular expenses matters for households. Use realistic timing rather than the earliest possible outcome.
Compare the complete cost
Review the payment schedule alongside fees, security and settlement conditions. Compare options using the same assumptions. A smaller monthly payment can still mean a larger total repayment when the term is longer.
Leave room for a slower outcome
Consider delayed receipts, extra expenses or a project that takes longer. The aim is to understand whether obligations remain manageable under those conditions. Discuss the assumptions before agreeing to the facility.