Build the plan around cash dates
Create a calendar of supplier payments, wages, customer receipts and existing debt payments. Date each proposed drawing. Use expected receipt dates, allowing for the customer's actual payment cycle.
After every drawing and principal repayment, update outstanding debt and available credit. Repaying may create room to draw again, but another drawing restores debt. Test a delayed receipt before using that room for another purchase.
Read the payment rule, not just the interest rate
Break each scheduled debit into principal, interest and fees. Confirm which balance each charge uses and when it is calculated. Interest on money drawn and a fee for keeping a facility available are different costs; an unused limit can still carry a charge under the agreement.
Confirm the principal component, payment dates, fee basis, extra-payment treatment and access conditions in your agreement. A flat principal amount, a percentage of the balance and an interest-only payment produce different debt paths. A calculator's average payment may differ from the lender's minimum, and minimum payments may leave debt at your chosen date.
Keep the remaining debt visible
Report three separate totals: cash drawn, principal repaid, and interest plus fees. The closing principal is drawings less principal repaid, assuming no opening debt or capitalised charges. Interest and service fees paid from your bank account are borrowing costs; they do not reduce principal.
If the forecast ends with a balance, identify the receipt or other funding that will settle it. A debt balance that persists through repeated cash cycles needs a different discussion from a temporary timing gap. Ask about review, suspension and closure provisions before treating future access as certain.
What to prepare
- List drawings and expected receipts by date.
- Confirm the daily interest and day-count convention.
- Check fees on both used funds and facility access.
- Use the contractual principal repayment rule.
- Show peak borrowing, cash payments and closing debt.
- Test delayed receipts and confirm access conditions.
Common questions
Is the approved limit the amount I owe?
No. The limit is the facility ceiling. Debt depends on drawings, principal repayments and any charges added to the balance; access fees may still be based on the limit.
Does paying interest clear any principal?
No. Only the portion allocated to principal reduces principal debt. Check how each debit or extra payment is allocated on the account statement.
Are these calculations a lender repayment quote?
No. They are pre-tax planning estimates. Your agreement controls rates, fees, payment allocation and access. Confirm the actual schedule and any final settlement amount with the lender.
General information only. Product terms and availability vary. Check the actual proposal and obtain advice appropriate to your circumstances.