Loan Payment Scenario

If the company wants to defer its loan payments to improve its cash flow, how can I see the impact this decision will have on the cash flow? 

To understand the impact of deferring a loan payment, we use Helm’s Scenario function to show the available options a company has.

If the company is currently making interest payments on a loan, the payment will show up in the base case view as an expected payment under Forecasting Rules. 

If the company hasn’t started loan payments yet, you can create a forecast rule for the scheduled payment.

This step is essential to complete to be able to compare making loan payments now versus later.

Add a Forecasting Rule:

  1. Click on the Forecasting Rules
  2. Select the add button (+)
  3. Enter the details of the payment.
  4. Once you create the rule, you can update the colour, so the rule shows in the graphs view as a different colour than other payments. Click on the three dots and select update colour to pick a colour of your choosing.

To run a scenario where the client wants to defer their loan payment, we create a new Scenario.

  1. Select the Scenario 
  2. Add a new scenario. Make sure the name makes sense to you. Add a description if you want to run multiple scenarios to compare.
  3. Select a colour that contrasts with existing colours.

Once you create the scenario, ensure you are working in the right scenario by clicking on the scenario name.

To adjust the loan payment date.

  1. Go back into the Forecasting Rules. 
  2. Click on the three dots of the loan payment rule.
  3. Change the date, but keep all other details the same.
  4. Save your changes.

You’ll now be able to see the impact the loan payment deferral has on your cash flow. You can repeat this process with different variables to show your clients alternative scenarios to manage their cash flow.