Financial Modelling for Startups, Lenders and Investors
Financial modelling turns your business assumptions into a working spreadsheet: profit and loss, balance sheet, cash flow, funding and returns, all linked. Founders use it to raise money, plan growth or test a decision. We build the model, explain every input and hand it over so your team can keep using it.
What it is
A financial model is a spreadsheet that mirrors how your business makes and spends money. You change an assumption, such as price, volume or hiring, and the model shows what happens to profit, cash and funding need. It swaps guesswork for arithmetic.
A good model has three linked statements: the profit and loss account, the balance sheet and the cash flow statement. Around them sit an assumptions sheet, a funding schedule and returns analysis. If the balance sheet does not balance, the model is wrong. We test for that in every case.
Who it applies to
Startups preparing to raise
Investors expect to see how the round will be used and when you turn profitable. They will test your assumptions, so the logic has to hold.
Businesses seeking a loan
Lenders look at the debt service coverage ratio over the loan tenure. A model shows it year by year and shows how much cushion you have.
Owners planning growth or a sale
A new plant, a new product line or a stake sale all turn on the numbers. In practice, owners often pick the wrong option on instinct. A model lets you compare the options before you choose.
Why it matters
Spot cash trouble early
Profit on paper does not pay salaries. Picture a Faridabad auto-parts maker waiting 90 days on payments from a large buyer: the model shows the month cash runs low, so funds are arranged in time.
Answer investor questions fast
When someone asks “what if sales fall by a fifth?”, you change one cell and show the answer.
Keep one set of numbers
Your budget, loan application and pitch deck all use the same numbers, so they never contradict each other.
Documents required
Past numbers
- Last two or three years of financial statements
- Latest trial balance or management accounts
- Current loan and repayment schedules
Business inputs
- Price list and expected volumes
- Cost structure, including salaries and rent
- Planned capex and its timing
Plans and funding
- Funding you are seeking and the expected terms
- Any existing shareholding details
- Business plan or pitch deck, if available
How it works
Agree the purpose and horizon
We confirm who will read the model, a bank, an investor or your board, and pick the time frame and detail to match.
Collect and clean the inputs
We go through your past financials and your plans, and mark any assumption that looks off before we build on it.
Build the linked model
We set up the assumptions sheet, the three statements, the funding schedule and the returns tests. Every output traces back to an input.
Stress-test the model
We run base, best and worst cases, and sensitivity tables on price, volume and cost, then check that the balance sheet balances in every case.
Hand over and explain
You get the Excel file and a short walkthrough. We explain how to update it, so your team is not dependent on us.
What a financial model usually contains
| Part | What it shows |
|---|---|
| Assumptions sheet | Price, volume, costs, tax rate, working capital days, one place to change |
| Profit and loss | Revenue, costs and profit by month or year |
| Balance sheet | Assets, liabilities and equity at each period end |
| Cash flow | Cash in and out, and the funding gap |
| Debt and funding schedule | Loan drawdown, interest, repayment, equity raised |
| Returns and ratios | DSCR, IRR, payback, break-even |
| Scenarios | Base, best and worst cases side by side |
DSCR is the cash available for debt service divided by interest plus principal. Below 1 means the business cannot meet repayments from its own cash. Lenders set their own minimums, so we show you the ratio and how much room you have above it.
Timelines
Simple model
A single-product business with clean past accounts is the quickest to build. Share your inputs promptly and it moves fast.
Complex model
Multiple products, locations or funding rounds take longer, because each adds assumptions that have to link correctly.
Updates
Once the model is built, refreshing it with actual results each quarter is much faster than starting over. We can do that for you.
What happens if you skip it
Funding delays
A lender or investor who cannot check your numbers will ask for more papers, or walk away. A model answers questions in one sitting.
Wrong loan size
RBI’s guidelines let banks size working capital for small units on at least 20% of projected turnover, up to ₹5 crore of limit. A weak turnover forecast makes the request shaky.
Surprises in cash
Here is the catch: a profitable business can still miss payroll or a repayment in a tight month if nobody forecast the cash.
Frequently asked questions
What is financial modelling in simple words?
It is building a spreadsheet that forecasts your business from a set of assumptions. You enter things like price, volume and costs, and it produces profit, cash flow and a balance sheet for the next few years. Change an input and every output updates. That lets you test decisions before you make them, and show others how you reached your numbers.
What is the difference between a financial model and projected financial statements?
Projected statements are a fixed set of forecast accounts for one scenario. A financial model is the working engine behind them. It has adjustable assumptions, multiple scenarios and sensitivity tests, so you can see how results shift. Banks often want the statements, while investors want the model. We build the model and can derive the statements from it.
Do banks accept a financial model?
Banks mostly want their own formats, such as a project report or CMA data, but a model is what you build them from. It keeps the projected turnover, margins and DSCR consistent across every document. Under RBI guidelines, working capital for small units is assessed on at least 20% of projected turnover, up to ₹5 crore. We tell you what your bank will ask for.
What is DSCR and why do lenders look at it?
DSCR, the debt service coverage ratio, is the cash available for debt service divided by interest plus principal for the period. A ratio below 1 means the business cannot cover its repayments from its own cash. Lenders set their own minimum levels. Our model shows DSCR for each year of the loan, so you know your cushion before the banker asks.
How many years should a model cover?
Cover as long as you can forecast with a reasonable basis. For a loan, the model should run through the loan tenure. For fundraising, three to five years is common, with the first year in monthly detail. Going further adds guesswork, not value. We help you choose a horizon that suits the purpose and the audience.
Will I get the Excel file?
Yes. You get the editable Excel file with all formulas visible, plus a short walkthrough of the sheets and inputs. You own it and can update it yourself. We build it so every output traces back to an input, so a banker or investor can follow it. If you want us to refresh it each quarter, we can.
Can you value my business from the model?
The model gives the projected cash flows that a valuation starts from. Where a valuation needs a registered valuer, for example under the Companies Act, section 247, a qualified valuer signs the report. We prepare the cash flow forecast and coordinate the inputs, so the valuation rests on numbers you have already tested.
What do I need to start?
You need your last two or three years of accounts, your price and cost details, planned capex, and an idea of the funding you want. If you have no history yet, a startup can start with assumptions and benchmarks. We then ask follow-up questions to firm them up. Tell us what you have, and we will say what is missing.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Ready to begin?
Tell us who will read the model and what decision hangs on it. We will scope the build and the inputs.