One document decides the fate of an FYY application: the feasibility study. A creditor reads it not to understand how difficult things are, but to test whether the proposed repayment plan will hold. The measure of a good file is therefore not the drama of its story but the defensibility of its assumptions.
1. Starting point: a full debt inventory
The first page of the model is not how much the company owes but how that debt is distributed. Balances by institution, currency, interest structure, maturity profile, collateral and any guarantees belong in a single table. In most companies this table is produced for the first time during FYY preparation — and the first surprises usually appear right there.
2. Turning operating reality into numbers
The credibility of a repayment plan depends on modelling the operating cycle correctly. This section has to show:
- Collection and payment terms and inventory turnover — that is, the cash conversion cycle
- Seasonality of sales and its effect on monthly cash
- Sustainable operating profitability: adjusted EBITDA, stripped of one-off items
- Committed capital expenditure and the movement in working capital requirement
The point is to establish how much cash the business genuinely produces for debt service. The repayment plan should sit below that figure, not on top of it.
3. Cash flow on two horizons
A solid file works across two time frames. Short term: a 13-week liquidity schedule in weekly detail. Medium term: monthly and annual projections covering the restructuring period. The first answers "can it survive the coming quarter"; the second answers "can it carry the plan to the end". A creditor wants to see both.
4. Scenarios and stress testing
To an experienced credit analyst, a single-scenario model is an incomplete one. Present at least three: base, downside and upside. The downside is the one that matters — show whether the repayment plan still holds under a reasonable deterioration in volumes, exchange rates and collection periods. If you do not surface your own weak points first, the other side will, and from that moment they set the agenda.
5. Justifying each request, instrument by instrument
A file does not end with "we want five years with two years' grace". Every request needs a counterpart in the model: which month creates the blockage, how the requested instrument clears it, and whether an alternative with a lower approval threshold would achieve the same result. Ordering requests around the reality of the thresholds shortens the process directly.
6. Operational commitments
A file containing only financial demands reads as one-sided. Setting out what the company will do on its own side — cost reduction, disposal of idle assets, simplification of the activity portfolio, establishing reporting discipline — with measurable targets changes how seriously the file is taken. Creditors want to see that they are not carrying the risk alone.
All six should be complete before the ninety-day clock starts. We build the feasibility study not as an application document but as the financial plan that will run the company for the next three years; the application file is simply its outward-facing version.
This article is general information and does not constitute legal advice.