Corporate Debt Lab · LFS

Liquidity & Funding Simulator

LFS is a planning tool for individuals and companies that need to fund a large payment. It compares four ways to obtain the money: use available cash, sell investments, borrow against an investment portfolio, or combine these sources.

You enter the payment, available cash, the reserve you want to keep, investments, loan terms and any expected future receipt. LFS calculates the funding available, interest and fees, month-end cash balances, investments retained and debt left to repay over your chosen period.

You can compare the plans side by side and test a delayed receipt, falling collateral values and tighter lending terms. The results flag plans that cannot fund the payment, a cash reserve that is breached and collateral-related repayments. UK and US examples provide starting points; optional tax effects use assumptions you enter.

The practical question is: “How can I fund this payment while keeping enough cash if my plans change?”

LFS uses your assumptions, not bank offers or forecasts. It models one person or company in one currency, at monthly intervals. Tax profiles are not country tax calculators, and lender demands can occur sooner than the model’s monthly steps.

Personal or company finances · One currency · Calculations on your device

Choose a source. Compare the consequences.

Start with a caseThen adjust the figures and compare.

Assumptions and what to test

Payment and available resources

Currency

Use amounts for one person or company. Currency changes labels only; it does not convert values.

Payment now Available cash Minimum cash reserve Investment portfolio Annual capital growth (%) Expected receipt Receipt month

Field explanations

Payment now: The full payment to fund, such as an acquisition, equipment purchase or personal expense. Do not deduct available cash.
Available cash: Accessible bank cash, including the reserve below. Exclude investments, loan proceeds and the future receipt.
Minimum cash reserve: Part of the available cash above, not an additional amount. The results flag when cash falls below this level.
Investment portfolio: Investments owned by the same person or company that could be sold or pledged for the loan. Use current market value, not purchase cost.
Annual capital growth (%): Enter 6 for 6% per year or −10 for a decline. This is an assumption, not a forecast: constant annual capital growth, compounded monthly. It changes portfolio value and collateral. Dividends and cash distributions are excluded.
Expected receipt: One separate net receipt, such as sale proceeds or a customer payment. Exclude it from opening cash and monthly cash flow. Enter 0 if none.
Receipt month: Month 0 is now; 12 means one year from now. The receipt repays borrowing using cash above the chosen reserve. Ignored if the receipt is 0.

Cash flow and analysis period

Other monthly cash flowAnalysis period (months)

Field explanations

Other monthly cash flow: After other costs and taxes, before this payment, receipt and loan.

Loan terms and combined plan

How the four plans are constructed

Use cash: pay the whole amount from existing cash.

Sell investments: sell enough to fund the payment and, if included, the sale tax.

Borrow: fund the payment with a loan secured against the portfolio.

Combine: use the cash and net sale proceeds you specify below, then borrow the balance.

Enter the terms of an available loan, or assumptions you want to test. The same terms apply to both borrowing plans. An unfunded plan is flagged; no extra funding is invented.

Annual loan rate (%)Loan fee (%)Fixed loan feeLending value (%)

Field explanations

Annual loan rate (%): Enter 7 for 7% per year. Interest is paid monthly; the loan principal is not repaid monthly.
Loan fee (%): Enter 1 for a 1% upfront fee, or 0 if none. The model adds the fee to the amount borrowed.
Fixed loan fee: An additional one-off fee in the chosen currency. Enter 0 if none; this fee is also financed.
Lending value (%): For example, 50% of an eligible portfolio worth 1,500,000 supports 750,000 of debt, in the chosen currency. Use a lender-confirmed percentage or an explicit assumption.

Set the combined plan

Cash contributionNet investment sale

Field explanations

Net investment sale: The rest is funded by the loan. Tax and fees are grossed up when included.

Optional tax assumptions

Include tax

Tax excluded. Results are before tax; this does not mean no tax is payable.

Model two effects: tax on investment gains realised now, and an optional cash benefit from eligible loan interest. Use confirmed effective assumptions for your case. The UK profile is a limited company illustration, not a personal tax calculator. A country label does not load tax law.

Portfolio tax cost basisEffective tax on realised gains (%)

Field explanations

Portfolio tax cost basis: The tax acquisition cost of the portfolio. Sales reduce value and basis proportionally; individual tax lots are not selected.
Effective tax on realised gains (%): Applied to positive gains, not the entire sale amount. Enter an effective rate that reflects your circumstances; losses, bands and exemptions are not calculated.

Include an interest tax benefit

Off by default. Security over investments does not establish eligibility. Only include a benefit you expect to be able to use.

Field explanations

Interest qualifying for relief (%): Enter the proportion eligible for an actually usable benefit, after applicable restrictions.
Tax benefit rate (%): Applied to the qualifying interest, not to loan principal.

Timing, country label and review notes

Timing remains part of the calculation. These are user assumptions, not statutory deadlines.

Sale tax paid in monthInterest tax benefit received in monthCase / profile nameTax residence / jurisdiction labelTax year / period

Field explanations

Sale tax paid in month: 0 = immediately. Tax is reserved at sale and cannot fund other payments, even if paid later.
Interest tax benefit received in month: One cash settlement for eligible interest paid through this month. Later interest receives no modelled benefit. No benefit is received if this month is outside the analysis period.
Tax residence / jurisdiction label: For reference only. No automatic country rates or cross-border rules.

Conditions and review notesSource / review reference

UK illustration references checked 26 October 2026: HMRC corporation tax rates · Company asset disposals. The 25% assumption does not determine company status, reliefs or deadlines.

Import tax assumptions

Changes to test

Receipt delay (months)Portfolio fall (%)Shock monthLoan rate increase (pp)Stressed lending value (%)

Combined stress applies these changes together. The price shock occurs once; entered capital growth continues thereafter. These are assumptions, not forecasts.

YOUR COMPARISON

Funding comparison

Start with the comparison below. Each plan funds the same payment, but uses different resources. Compare the cost, cash reserve and remaining assets together.

Four funding plans at a glanceCompare two funding plans

First planSecond plan

Read the status alongside the figures. A lower cost alone does not make a plan preferable.

Analysis — what this scenario tells you

What this scenario tells you

A lower interest-and-tax figure is not automatically the better outcome. Repaying principal reduces debt; it is not a financing cost. Tax deferred on investments is not tax permanently saved. These results explain the chosen assumptions, not a personalised recommendation.

START WITH THE END RESULT

What is left after selling the investments and settling the debt?

How we get to the final cash — no double counting

At what investment return do selling and borrowing break even?

Uses the selected scenario, horizon, tax and loan terms. Constant capital growth is compounded monthly; a combined-stress shock is applied on top. Dividends, distributions, cash interest and disposal fees are excluded. The threshold is a scenario calculation, not a forecast or guaranteed return. A cash or collateral shortfall on the way is not cured by a good final result.

Threshold calculation and limits

Compares final cash after selling all remaining investments, applying the entered effective tax rate to positive gains and settling all remaining debt and initial sale tax. Includes fees, interest and only tax benefits received by the horizon. Searches annual capital growth from −90% to +100% in one-percentage-point intervals, then refines detected sign changes. Displays detected crossings; narrow or tangential crossings can be missed. Constraints are rerun for every tested return. No root in this range does not prove that no break-even exists elsewhere.

Tax sensitivity is available when tax assumptions are included. Open the Tax tab, enter your assumptions and compare again.

Compare every measure — with explanations

Read across a row to compare the same measure. “Not funded” means the plan cannot make the initial payment with the specified resources; its projected outcome is excluded.

When does the cash buffer become tight?

Inspect plan

The solid line is spendable cash at each month-end. The dashed line is the reserve you want to retain; crossing it is a reserve breach, not necessarily a cash shortfall. Cash below zero means additional funds are required. Tax set aside is excluded. Intra-month timing is not modelled.

Trace the calculation month by month

“Principal repaid” reduces the loan balance; “Interest” is a cost. “Tax held” is money set aside and unavailable to spend. Collateral headroom is the assumed lending value of the remaining portfolio minus debt; a negative figure is an uncured shortfall, not a cash balance.

Inputs and tax assumptions used in this result

Load saved case

HOW TO USE THIS TOOL

Using the simulator

Enter your financial position

The payment, cash, minimum reserve and investments. Add an expected future receipt if it could repay the loan.

Set the loan and alternatives

Enter a quoted or assumed interest rate and lending limit. For the combined plan, choose the cash and net sale proceeds; the rest is borrowed.

Compare, then test the risks

Click Compare funding plans. Review all four plans, then switch between the base case, a delayed receipt and combined stress.

Before you begin: use figures for one person or one company, in one currency. Keep personal and company resources separate. You do not need names, account details or documents. Tax is optional; the tool does not select investments or obtain a loan offer.

Method and scope

A single-entity, single-currency comparison of one payment, one expected receipt, monthly net cash flow, a proportional investment sale and an interest-only secured loan. Fees are financed and grossed up. Interest is paid monthly. On receipt, cash above your reserve repays debt; remaining debt stays visible.

Calculation method, tax boundaries and limitations

Net sale = gross sale minus estimated gain tax. Gross loan = (net loan needed + fixed fee) / (1 − percentage fee). Tax is set aside at sale and cannot finance other payments. Cash cost = sale tax + interest + loan fees − modelled interest tax benefit. It excludes principal and the payment funded.

Collateral is the remaining portfolio times the assumed lending percentage. Excess debt is cured from available cash, even if this uses your reserve. Any uncured amount is flagged; forced sales are not simulated. Demand repayment and discretionary lender actions can occur outside this formula.

End net position = cash + tax set aside + portfolio − debt − unpaid sale tax. The final-cash comparison assumes all remaining investments are sold at the horizon and all remaining debt and modelled sale taxes are settled. It applies the entered flat rate to remaining positive gains, with no loss credit or disposal costs. This closing sale is a comparison assumption, not an actual scheduled transaction or tax liability due now. The asset or benefit acquired with the payment is excluded equally from all plans.

Tax profiles are parameters, not jurisdictional legal engines. No personal tax bands, share-matching rules, tax losses, participation exemptions, group relief, withholding taxes, treaties, foreign exchange, transfer pricing, tax filing or automatic legal eligibility. Cross-border structures require a separate validated model. No taxes are included when tax mode is off.

All amounts use one display currency; no conversion. No market data, dividends or cash distributions, inflation, discounting, daily interest or intramonth cash movements. The entered annual capital growth is compounded monthly and combined with the selected price shock; it is an assumption, not predicted performance. Inputs and outputs are scenario estimates, not a market forecast, loan approval or investment/tax recommendation.

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WORK THROUGH THE DECISION