12 | Budgeting and Financial Planning
Your forecast isn’t just for your lender — it’s how you manage your business. Build one that gives you confidence and clarity.
Create a three- statement model:
Plan for at least 24 months, broken out monthly. Build a base case, then stress test it: Revenue down 10% Gross margin compressed by 1–2 points Overhead up slightly Run your DSCR (Debt Service Coverage Ratio) — does it stay ≥ 1.25?
Also model:
T Bank Insight We help you pressure test your forecast before it goes to underwriting — and we’ll flag missing assumptions or unrealistic growth rates that could slow your approval. Our goal: financial plans that actually match your operating reality.
Working capital cycle: receivables, payables, and inventory Capex: large repairs or replacements forecasted over 1–3 years Seasonality: do you have the cash buffer for a soft Q1 or post- holiday slowdown?
Income Statement Balance Sheet
Cash Flow Statement
“Your forecast is your financial playbook — treat it like one.”
Case Example — Printing Company Buyer Frees Cash for Expansion A printing services buyer negotiated Net-45 payment terms with paper vendors, which freed up $150K in working capital — enough to fund a second shift without taking on more debt. Action Checklist Build a 24-month forecast with base and downside cases Track DSCR and leverage with a simple dashboard Review working capital assumptions with your CPA Fund a capex reserve for end-of-life assets Quick Summary A good forecast helps you sleep better and operate faster — even when things don’t go as planned.
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For informational purposes only. Not legal, tax, or financial advice.
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