What is a projected cash flow statement

A projected cash flow statement demonstrates a person's chances of repaying a bank loan in a timely fashion. The statement will contain information such as net income, total savings, money held in investments as well as any benefits or other outside income received. The statement will also include outgoings, which includes everything from a person's rent or mortgage payments and council tax bill, to any child support or debts they have to pay. In total, the statement will indicate as accurately as possible how much disposable income a person has each month and whether it would be enough to comfortably cover a loan repayment.

While a projected cash flow statement may sound daunting, it is actually as much a useful tool for the potential borrower as it is the lender. You will be unable to obtain a mortgage without completing a cash flow statement first, which means your chances of receiving the mortgage are significantly higher than if you didn't complete one. Some people who may first appear to be a loan risk, prove otherwise by completing the necessary statements.

If you are a business than you will use a projected cash statement in a different way. Completing this kind of statement from a business standpoint is a good way to complete a periodic check on your business' health. You will also be able to spot any minor financial problems and sort them out before they become more of a problem. A projected cash flow statement for a business is how much money your business is likely to earn in the coming year, based on facts and figures from previous years.

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