Keep three facility figures separate
| Figure | What it tells you |
|---|---|
| Facility limit | The approved ceiling, subject to the agreement’s access conditions. |
| Principal outstanding | The debt remaining after drawings and principal repayments, plus any applicable capitalised amounts. |
| Available credit | Room to draw under the limit and facility rules; it is not money already received. |
Swipe or scroll the table sideways to see every column.
Repaying principal can create room to draw again, but reusing it increases debt. Do not treat both the undrawn limit and the resulting drawing as cash already in your forecast.
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.
Worked example: two weeks of drawings and repayments
Assume a $50,000 limit, 18.25% annual interest on a 365-day basis, a $20 weekly fee and $1,000 principal repaid weekly. Interest and fees are paid separately rather than capitalised. These are illustrative inputs, not available rates or quoted terms.
| Date or period | Event | Principal remaining |
|---|---|---|
| Start of 1 October 2026 | Draw $20,000 | $20,000 |
| 1–7 October | Accrue $70 interest: $20,000 × 18.25% × 7/365 | $20,000 |
| 8 October | Pay $1,000 principal + $70 interest + $20 fee | $19,000 |
| 8 October, after payment | Draw another $10,000 | $29,000 |
| 8–14 October | Accrue $101.50 interest: $29,000 × 18.25% × 7/365 | $29,000 |
| 15 October | Pay $1,000 principal + $101.50 interest + $20 fee | $28,000 |
Swipe or scroll the table sideways to see every column.
Drawings total $30,000; principal repayments total $2,000. Interest of $171.50 plus $40 fees gives $211.50 borrowing costs. Cash payments are $2,211.50, but $28,000 principal remains immediately after the second payment.
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.
Connect the closing balance to an actual receipt
Suppose the business expects a customer receipt of $30,000 on 15 October and intends to use $28,000 toward principal after the scheduled payment. First allow for the other operating costs sharing that receipt and confirm how extra repayments are allocated. The receipt itself does not reduce facility debt until a principal payment is made.
If the receipt is delayed and no extra principal is repaid, the example remains at $28,000 immediately after 15 October rather than clearing. Later interest, fees and scheduled principal payments depend on the agreement and must be added to the next period. Do not call an expected receipt a repayment already made.
Check whether the balance closes between cash cycles
| What the plan shows | What to investigate |
|---|---|
| A drawing is repaid from an identifiable receipt | Confirm the receipt date, operating cash needed first and facility payment rules. |
| The next drawing arrives before the earlier balance is repaid | Test peak borrowing and how a delayed receipt affects available credit. |
| Debt persists and grows across repeated cycles | Review the underlying cash deficit and whether a different funding structure or operating change is needed. |
Swipe or scroll the table sideways to see every column.
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.