Debt Model

Establish opening principal

Start from debt outstanding at the forecast boundary. Allocate opening principal to named loans without duplicating the balance-sheet total. Identify each loan’s rate and planned movement dates. This schedule forecasts funding inside the financial model rather than determining borrowing capacity.

The opening financial position must agree with the schedule. Keep any separately modeled short-term revolver identifiable. The Debt reference distinguishes the simple target balance from Advanced loans with dated draws, repayments and supported maturity assumptions.

Choose a target or explicit loan movements

A target closing balance implies the borrowing or repayment needed to reach it. It suits a top-down annual plan, but does not itself describe separate gross flows or refinancing timing. Set each relevant period’s target rather than assuming one changed year will persist indefinitely.

For an explicit loan, closing principal = opening principal + draws − repayments. At an entered maturity, the Advanced schedule repays outstanding principal. This is a schedule assumption, not an analysis of renewal availability or a separate maturity-profile tool.

Keep principal separate from earnings

A draw is a financing inflow and liability increase, not operating income. Repayment is a financing outflow and liability decrease, not operating expense. EUR 200,000 opening debt plus a EUR 100,000 draw produces EUR 300,000 closing debt in the preview’s 2026 period.

For 2027, EUR 300,000 less EUR 50,000 repayment leaves EUR 250,000. Draw and repayment lines remain visible rather than being netted into revenue. The debt transaction-effect guide compares selected borrowing or repayment across the statements.

Use the interest source and timing that apply

Advanced loans charge interest over intervals between dated principal movements. The preview uses 5% and a 1 July draw: EUR 200,000 is outstanding before the draw and EUR 300,000 afterward. Actual-calendar-year exposure produces approximately EUR 12,521 interest in 2026.

A 1 July 2027 repayment reduces exposure from EUR 300,000 to EUR 250,000, giving about EUR 13,740 interest. The simple annual model and transaction guide instead use opening debt. The interest-source reference explains how a detailed expense source can replace schedule-derived interest; do not add both charges.

Connect funding to investment

If borrowing funds equipment, connect the need to the investment plan. Record the draw separately from the payment and use the depreciation forecast for later non-cash charges. Receiving a loan does not prove that the project is profitable.

The Assets & Financing Model combines the schedules. The cash-flow reference explains financing movements; the cash reference shows how they combine with operations and investment to determine closing cash.

Reconcile principal, expense and cash

Check opening plus movements against closing principal. Trace interest through pre-tax earnings, modeled tax and net income, then its cash payment under this model’s operating cash-flow convention. Detailed repayments cannot exceed outstanding principal.

A shortfall can create the explicit hypothetical revolver and later interest. It identifies financing need, not an approved facility or credit headroom. Review dividend cash and equity effects before interpreting a debt-funded balance as better operating cash generation.

Compare funding assumptions in the same operating case

Use a separate scenario for another draw date or repayment plan. The What-If reference documents discrete year-end principal transactions, whose conventions differ from dated Advanced loans. Preserve the operating forecast when comparing funding choices. Open the model above to enter your assumptions; covenant tests, debt capacity and refinancing analysis require separate workflows.