Executive Summary
Illustrative wholesale company • 13-week liquidity plan • Fictional figures
The business begins with $160,000 of cash and requires a minimum $100,000 cash buffer. Without financing, forecast cash falls to approximately -$360,000. The optimizer identifies a feasible mix of draws and repayments that protects the cash floor while minimizing modeled financing cost.
1. Cash Position
The operating forecast shows that cash pressure becomes material early in the period. Without financing, cumulative cash reaches a low point of roughly -$360K.
The optimization therefore has two jobs: fund the gap and avoid carrying unnecessarily expensive debt.
2. Financing Facilities
| Facility | Limit | Annual rate | Draw fee | Role in the plan |
|---|---|---|---|---|
| Bank Revolver | $250,000 | 8.25% | 0.10% | Primary lower-cost funding source |
| Fintech LOC | $150,000 | 14.50% | 0.50% | Secondary capacity when the revolver is insufficient |
| Emergency Line | $100,000 | 19.50% | 1.00% | Last-resort liquidity when cheaper capacity is constrained |
3. Recommended Funding Plan
| Decision point | Illustrative action | Why |
|---|---|---|
| Cash first approaches the minimum | Draw approximately $95K from the Bank Revolver | Use lower-cost capacity first |
| Liquidity pressure deepens | Use remaining Revolver capacity, then add Fintech LOC | The Revolver alone cannot cover the gap |
| Peak funding period | Add limited Emergency Line usage | Cheaper facilities are capacity-constrained |
| Cash improves | Repay higher-cost balances when feasible | Reduce carrying cost without breaching the cash floor |
| Forecast end | Retain approximately $242.5K of debt | Avoid forcing repayment that would create a new shortfall |
4. Management Interpretation
5. Decision Summary
The optimized base case produces an estimated $7,540 financing cost, reaches approximately $464,517 of peak debt, maintains the required $100,000 minimum cash balance, and ends with approximately $242,540 of debt outstanding.