Free business tool
The Funding Growth Calculator
Growth has to be paid for before it pays you back. See how much cash your plan will eat, how fast you can grow from your own cash, and how much funding you'll need.
- 1Your figures
- 2Your growth plan
- 3Your results
Step 1 of 3
Enter your figures
Last year's accounts are all you need. We've pre-filled the fictional Brightwater Fabrications example from our Levers for Growth guide; replace it with your own numbers.
Last year's turnover
Revenue less direct costs, as a % of revenue
How long customers take to pay you, on average
Stock and work in progress, in days of direct costs. Use 0 if none
How long you take to pay suppliers, on average
After tax and dividends: what's left to reinvest
Who this is for
Owners who are planning to grow and want to know whether they can fund it from the business's own cash, or how much they'll need to borrow or raise. It's especially relevant if customers pay on credit terms, or if you hold stock or work in progress.
What it measures
Growth has to be paid for before it pays you back. Extra sales mean more money owed to you by customers and more stock or work in progress, and both have to be funded before the cash comes in. The calculator uses your sales, gross margin, payment terms and the profit you keep in the business to work out three things:
- how much cash each year of your growth plan will tie up
- your self-funded speed limit: how fast you can grow from your own cash
- how much funding you'll need to grow faster than that
It also shows how much tighter payment terms could release before you borrow.
How to read your results
Start with the speed limit. If your plan grows faster than it, the gap has to be funded from somewhere, or the growth will drain your bank balance. Next, look at the "fund it from inside first" levers. Collecting cash a few days faster or holding less stock often closes much of the gap without borrowing. Whatever gap is left is what you take to a lender, and you'll go with a number and a plan rather than a request.
Worked example: Brightwater Fabrications
Brightwater Fabrications is a fictional manufacturer with £4m of sales, a 40% gross margin, 60 debtor days, 45 stock days and 40 creditor days. It keeps £150,000 of profit in the business each year. On those terms, roughly 17p of every extra £1 of sales is tied up in customers and stock. That puts its self-funded speed limit at 22% growth a year. Its plan is to grow 25% a year for three years, from £4m to £7.8m. That's faster than its own cash can carry: it needs about £86,000 of funding at the peak. But every day off its debtor days releases about £11,000, so collecting just three days sooner would cover year one's gap on its own.
Sample results · PDF
See Brightwater's full results: every figure, what it told them and what they did next.
Frequently asked questions
- Why would a profitable business need funding to grow?
- Because the profit arrives after the costs. You pay staff and suppliers to deliver the extra work now, and your customers pay you later. The faster you grow, the bigger that gap becomes.
- What figures do I need?
- Last year's sales and gross margin, roughly how long customers take to pay you, how much stock you hold and how long you take to pay suppliers, and the profit you keep in the business after tax and dividends.
- Can I reduce the funding I need?
- Usually, yes. Faster invoicing, deposits, tighter credit control and holding less stock all release cash. The calculator shows how much each would be worth before you approach a lender.
Related reading
Related tools
Can I afford to grow, and fund it?
Scorecard · 5 minutes
Growth Scorecard →
Score 24 statements and see whether growth will strengthen or strain the business.
Scorecard · 6 minutes
Funding Readiness Quiz →
Score yourself out of 100 and see which funding is likely to fit.
Guide · 24 pages
Levers for Growth →
Where growth really comes from, how to fund it, and a 90-day plan to act on.
Guide · 34 pages
UK SME Funding Handbook →
Every main funding option, what it costs, and what to do when the bank says no.