Working capital, loan moratorium, repayment schedule: all of these need to be planned on day one, not discovered on day three hundred.
Why it happens
- The report funds the plant but under-funds the working capital needed to run it.
- Ramp-up is assumed to be fast, so revenue arrives months earlier on paper than in reality.
- The moratorium ends before the plant reaches stable output.
- Cost overruns are paid from working capital.
What to do instead
- Plan working capital and a realistic ramp-up curve in the DPR, not as an afterthought.
- Match the moratorium and repayment schedule to that ramp-up.
- Keep a contingency, and track cash monthly against the plan from the first day of the project.
How BizTek helps
Our DPRs model working capital, ramp-up and repayment month by month, with sensitivity tests. Once the project is running, Project Management and a CFO on Call can keep the cash plan honest.
Has this happened on your project? Tell us where it stands. The first conversation is free and confidential, and we are happy to sign an NDA first. Start a conversation