Loan Documentation and Cash Flow Projections: What You Need to Prepare
Whether you're a foreign investor applying for an investor permit, or an established business approaching a bank for financing, the same two documents tend to come up again and again: solid loan/financing documentation and a credible cash flow projection. Both are judged on the same thing — whether the numbers hold together and whether they tell a believable story about the business.
This piece covers what's typically required, how the two purposes overlap, and where businesses commonly go wrong.
Why This Comes Up Twice
If you've been through our company registration process, you'll recognise this requirement from the investor permit stage — applicants must submit a projected budget, capital expenditure plan, bank statements, and cash flow forecasts. Banks ask for a similar package when a business applies for a loan or an overdraft facility, just with more emphasis on repayment capacity and security.
Because the underlying analysis is so similar, businesses that prepare this properly once can generally reuse and adapt it for both purposes, rather than starting from scratch each time.
Loan Documentation: What Banks Typically Require
• Certificate of Incorporation and company constitution — confirming the entity is properly registered.
• Board resolution — authorising the company to borrow and naming the signatories.
• Financial statements — usually the last two to three years of audited or management accounts, where the business has trading history.
• Bank statements — typically six to twelve months, showing existing cash flow patterns.
• Business plan — outlining the purpose of the loan, how funds will be used, and how the business intends to generate the revenue to repay it.
• Security/collateral documentation — title documents, lease agreements, or other assets offered as security.
• Personal guarantees — for director or shareholder-backed lending, along with personal financial statements.
• Tax compliance certificates — confirming the company and its directors are up to date with FRCS.
Cash Flow Projections: What Makes One Credible
A cash flow projection is not just a spreadsheet of optimistic numbers — lenders and immigration officials are trained to spot projections that don't hold up. A credible projection generally includes:
• A clear time horizon — usually monthly for the first 12 months, then quarterly or annually for years two and three.
• Realistic revenue assumptions — tied to a stated basis (contracted work, historical sales, market comparables), not just a growth percentage applied to a guess.
• All operating costs, including wages, rent, utilities, insurance, and statutory obligations such as FNPF contributions and the FNU Levy.
• Capital expenditure timing — when equipment, vehicles, or property will actually be purchased, not just the total cost.
• Financing costs — loan repayments, interest, and any lease payments.
• A working capital buffer — most reviewers want to see that the business can absorb a slower-than-expected start.
• Sensitivity or downside scenario — a brief showing of what happens if revenue comes in 20–30% below projection.
Documentation Checklist
To prepare both a loan application and a supporting cash flow projection, you'll generally need:
• Certified copies of company registration documents
• Two to three years of financial statements or management accounts (if trading)
• Six to twelve months of bank statements
• A detailed business plan
• A cash flow projection covering at least the first 12 months, ideally 24–36
• Capital expenditure schedule
• Details of any existing debt or finance facilities
• Proof of the source of any equity or capital being injected into the business
Common Mistakes
• Submitting a cash flow projection with no stated assumptions behind the revenue line
• Leaving out statutory costs (FNPF, FNU Levy, VAT) from the expense projection
• Overstating revenue ramp-up in the first six months
• Providing bank statements that don't reconcile with the financial statements submitted
• Treating the loan application and the investor permit cash flow forecast as two unrelated documents, duplicating effort unnecessarily
How Alvin Kumar & Associates Helps
We prepare and review loan documentation and cash flow projections for clients across both purposes:
• Cash flow modelling — building a projection with defensible assumptions, correctly reflecting statutory costs like FNPF and the FNU Levy.
• Loan application packaging — assembling the financial statements, bank statements, business plan, and supporting documentation lenders expect.
• Alignment with investor permit requirements — making sure the same projections used for a bank application also satisfy what immigration authorities expect to see.
• Scenario and sensitivity analysis — stress-testing the numbers so you and any reviewer can see how the business performs under a slower start.
• Liaison with your bank — helping present the application in the format your specific bank expects.
Please note that approval of any loan or facility rests entirely with the lending institution, and we do not guarantee approval.
Email: alvin@akfiji.com
WhatsApp: +679 7142741