Reconcile the assigned sources
Refinancing Gap = max(0, amount due − replacement draw − designated cash paydown − equity contribution). Amount due follows the source loan at the settlement date. The gap answers whether the case explicitly assigns enough sources to that principal. It is not new debt or a cash inflow. A partial refinancing is valid modeling: its uncovered portion stays visible rather than being filled with fictional financing.
Designated cash is not another debit
The old loan’s full principal is repaid once. Designated cash paydown labels the portion expected to be covered by existing liquidity; it is not subtracted again. Settlement cash flow = replacement debt + equity contribution − amount due − upfront fees. Therefore, changing designated cash can change the funding-gap reconciliation without independently changing the actual cash debit. Inspect both the case gap and the resulting cash forecast.
Work through a partial replacement
A synthetic loan has 100 due. Enter replacement debt 70, designated cash 20, equity 5 and fees 2. Refinancing Gap is 5, while settlement cash flow is 70 + 5 − 100 − 2 = −27. Increasing designated cash to 25 closes the case gap but leaves settlement cash at −27. Whether available cash and other admitted funding can meet that payment and Minimum Cash is a separate liquidity question.
Fees, equity and overfunding
Upfront fees are immediately expensed as non-operating costs and paid through financing cash flow; the normal accounting calculation supplies tax and earnings effects. They are not capitalized or amortized. Equity is a simple cash contribution here, without Cap Table dilution. Debt/equity sources above principal due remain cash. Unused designated cash is never an extra withdrawal. For ownership effects, use the separate Ownership tools.
A covered maturity can still cause Required Funding
Required Funding = max(0, Minimum Cash − closing cash after available financing). A case can therefore have zero Refinancing Gap yet still leave a cash shortfall, particularly after fees or other payments. Conversely, available automatic financing can support cash without being an explicit replacement source in the case reconciliation. Neither measure should be added to debt. Before / after shows the resulting financial position.
Documents the current implemented behavior. Numerical examples are synthetic, not market assumptions.