SBA and bank loans
How big a loan will the numbers carry?
A lender works backwards from what the business already earns. It looks at your profit before interest, tax and depreciation. It wants a dollar and a quarter of that for every dollar of payment. Then it lends whatever those payments pay off over the term.
Build the projections with the loan below already in, or put your own profit in first.
So the size of the loan isn't really something you ask for. It's what your own profit carries at the rate and the term on offer, and the arithmetic below is the arithmetic they use.
A lender decides, not this page. It looks at collateral, credit, how long you've been trading and its own rules on top of this, and it can land somewhere else entirely.
What your profit carries
- The largest loan that still clears 1.25$592,878
- The payment on it$8,000
- A year of those payments$96,000
Coverage of 1.25 leaves $96,000 a year for payments out of $120,000 of profit. At $8,000 a month over 10 years, that pays off a loan of about $592,878.
What the full model adds
- Profit built up from your own revenue, costs and payroll month by month, rather than one figure typed once.
- Coverage in every year of the plan, because the year the loan starts is rarely the tight one.
- The month your cash sits lowest, and how low, which is the other half of what a lender reads.
- A Sources and Uses page that puts the loan next to what you're spending it on.
Building a plan is free. Saving it to an account, Excel and the print pack come with a paid plan, and the pricing page lists what each one holds.