Cash Flow
You can model borrowing on the plan and see what it costs.
Nearly every production borrows. Subsidies pay in arrears, the shoot has to be paid on time, and something bridges the gap. **Credits** is where that borrowing is modelled.
Open it with **Credits** in the rail — *Add a credit*.
Click **Credit** and fill in:
| Field | What it is | | --------------------- | ------------------------------- | | **Description** | what the facility is | | **Company** | which of your companies borrows | | **Amount** | the principal | | **Currency** | which currency | | **Date in** | when the money arrives | | **Date out** | when it is repaid | | **Yearly interest %** | the annual rate |
The column says it exactly:
Yearly interest rate. Interest is **simple** (not compounded), **actual/365**: charged per day on the principal from Date in to Date out.
So the cost is the principal × the rate × days ÷ 365. No compounding, and the term is the actual number of days between the two dates — which means **shortening the term is what makes it cheaper**, and the plan shows you by how much.
Like transfers, and unlike everything else in the grid, a credit is not placed by a cash-flow rule. Date in and Date out are the placement.
That is what makes them usable for planning: you move the dates and watch the curve, rather than editing a rule somewhere else and coming back.
The point is to size the facility against the trough:
1. Read the **Cumulated cash flow** row without any credit. Find the deepest negative point and when it occurs. 2. Add a credit for roughly that amount, dated **in** before the trough and **out** after the financing instalment that clears it. 3. Re-read the cumulated row. It should no longer go below what the company can carry. 4. Read the interest. That is the real cost of the gap.
Doing this before talking to a bank means arriving with an amount, a term and a cost rather than a request.
A credit belongs to a company, so in **Separate companies** it appears on that company's curve only. In combined it is production borrowing like any other — see [view one company, or all of them](/kb/article/view-one-company-or-all-of-them).
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