EBITDA vs Cash Flow for Lending: Why CFADS Wins for Debt Decisions Key Points EBITDA is a flawed metric for lending decisions because it ignores taxes, interest, capital expenditures, and working capital shifts. CFADS (Cash Flow Available for Debt Service) provides a more accurate measure of repayment capacity by reflecting real cash movement. Businesses that...
Debt as a Growth Tool: How Alternative Financing Helps Small Businesses Scale Key Points Traditional bank loans reject a large share of small business applicants, leaving owners without vital capital. Alternative financing for small businesses—such as invoice factoring, purchase order financing, and asset-based lending—offers faster access and more flexibility. Handled properly, debt can act as...
How EBITDA Lost Its Way: The BMI of Business Finance and Why Simplified Metrics Distort Real Health Key Points EBITDA and BMI share the same flaw: both simplify complexity and ignore the real factors that determine health—cash flow in business, metabolism in the body. EBITDA overstates strength by excluding capital needs and timing of payments....
True Cost of Debt Beyond Interest Rates: Structure, Timing, and Cash Flow Risks in Business Loans Low rates don’t always mean low cost. The real risk in borrowing lies in how a loan’s structure aligns—or conflicts—with your cash flow. Key Takeaways Interest rate ≠ true cost. Payment structure and timing determine real affordability. Cash flow...
Growth Trap in Business Finance: How Cash Timing Mismatches Kill Profitable Companies (Case Studies) Even profitable companies can fail when cash and debt timing don’t align. Two real stories reveal how timing traps derail growth. Introduction Growth is exciting—new customers, bigger orders, and rising EBITDA. But the growth trap in business lending catches companies when...
