Borrowing - the need for forecasts

Banks and similar finance houses will be looking for three key aspects, amongst others:

1. That repayments can be made out of cash flow
2. The value of suitable assets, such as debtors, stock, premises, equipment or vehicles
3. The value of net assets of the business

It's therefore important to compile a cash flow forecast and balance sheet forecast that reconciles to the P&L account forecast.