Detroit S-Corp, $3.8M revenue, $2.4M capex decision. 5-year 3-scenario model built. SBA application package prepared. Loan approved.
01The Situation
The owner had been running this auto parts manufacturer for 11 years with revenue at $3.8M and the plant running at 94% capacity, turning down orders. A second production line costing $2.4M would double throughput. His bank asked for a 5-year model before considering the SBA loan. His prior accountant said the numbers look good but could not produce the documentation needed.
02What We Did
We rebuilt a clean P&L and balance sheet and modeled 47 individual assumptions across revenue, costs, overhead, and debt service, all documented with source and rationale. Three scenarios: base, best with two new OEM contracts, and worst with a major customer reducing orders 30%. Even in the worst case, the loan was serviceable. That was the key finding that unlocked SBA approval.
This result came from our cash flow forecasting for manufacturers. See more client results.
Breakdown
| Scenario | Yr 1 | Yr 3 | Yr 5 | Gross Margin | CapEx Payback | Status |
|---|---|---|---|---|---|---|
| Best Case | $4.2M | $6.8M | $7.8M | 38% | 2.6 years | |
| Base Case | $3.8M | $4.9M | $5.6M | 36% | 3.4 years | |
| Worst Case | $3.1M | $3.6M | $4.1M | 31% | 5.1 years |
Production line now operational. Throughput increased 80%. Both OEM contracts in the best-case scenario converted within 6 months of opening.
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