So, you have a project to review, and want to understand how much it is likely to cost you to fund it. Aprao can help you by creating a fast and accurate way to estimate the finance costs for your project.
Quick interest estimates
This is the perfect way to run a quick appraisal; ideal for residual appraisals or when taking an initial look at a project.
In this video, we take a walk through using the 'Estimated' interest feature to calculate the likely interest cost.
This video also includes adding multiple lenders, senior debt and mezzanine finance.
Using the cashflow for an accurate interest estimate
Once you have an idea of the likely cost to finance a project you may want to appraise it on a more granular level. In order to do this we need to create a cashflow forecast which can be done in a matter of minutes (if you don't know how to, watch this video).
Once we have completed the cashflow we can switch the interest calculation from 'Estimated' to 'Cashflow' and Aprao will factor in all of the parameters set to provide you with an accurate look at what the interest will cost you based on the timings in the cashflow,
Why is this important?
Development projects usually take longer than expected so it is very useful to be able t understand the effect on the cost of the finance should this happen.
For example, here is my interest cost on an 18 month project.
Look what happens when the sales take a bit longer than expected and push out the project length by a few months.
As you can see, that equates to another £65k of interest for only a 3 month delay which in turn has an effect of the profitability of the project.
Sign up or log in to Aprao to give it a go for yourself.