Category D · Capital & Liquidity · Scenario 7
Funding Delayed or Tightened
The money you were expecting — a bank facility, investor funding or a loan renewal — isn't arriving when you planned, or the terms have become tighter. Without it, the business may struggle to pay bills on time. A week-by-week cash forecast becomes your most important tool.
Trigger
Funding arrangements are delayed, withdrawn or made more restrictive.
First move
Prepare a 13-week cash flow forecast and identify realistic short-term liquidity actions.
Immediate first response
Build a 13-week cash forecast showing every receipt and payment, and identify the week cash gets tightest.
First 24 hours
- Confirm today's cash position and available facility headroom
- List all payments due in the next 14 days, ranked by importance
- Identify overdue money owed to you that can be collected quickly
- Contact your lender or funder to understand the position
Next 7 days
- Complete a full 13-week cash forecast
- Run a collections push on overdue customer accounts
- Defer non-essential capital spending
- Discuss payment arrangements early with suppliers or Inland Revenue if needed
- Seek professional advice if you cannot meet obligations as they fall due
Next 30 days
- Agree a funding plan with the lender — renewal, restructure or alternative
- Explore options such as asset finance, invoice finance or shareholder support
- Reduce working capital — stock, debtors, payment terms
- Update the forecast weekly and share with key stakeholders
Typical causes
- Lender tightening credit policy
- Weaker financial results or forecasts
- Investor delays or changed conditions
- Facility renewal coinciding with a poor trading period
- Customers paying later, increasing the funding need
Early warning signs
- Overdraft regularly at or near its limit
- Bank asking for more information or more often
- Supplier payments being delayed to manage cash
- Tax payments falling behind
- Funding milestones slipping
Trigger indicators
- Forecast cash headroom below an agreed minimum within 13 weeks
- Facility renewal within 3 months without agreed terms
- Overdraft used above 80% of the limit for more than a month
Financial implications
- Inability to pay debts as they fall due is a serious legal matter for directors
- Late tax payments attract penalties and interest
- Supplier relationships can deteriorate quickly
- Rushed alternative funding is usually more expensive
Questions management should ask
- In which week does our cash get tightest, and by how much?
- Which payments are essential, and which can be safely deferred?
- How much overdue money could we realistically collect in two weeks?
- What does the lender need from us to proceed?
- What is our fallback if the funding doesn't arrive?
- Do the directors need independent professional advice now?
Common mistakes
- Hoping the funding arrives rather than planning for it not arriving
- Stopping communication with the bank
- Using tax money to pay other bills without a plan
- Leaving it too late to seek professional advice