A fundraising model should answer a difficult question: can the business reach the day the investment cash actually arrives? A profitable forecast next year does not cover a payment due before the funding round closes.
Scope: fundraising planning for UK businesses, with an illustrative September–December 2026 cash scenario in pounds. This is a modelling exercise, not a funding commitment or tax calculation. Sources checked on 15 September 2026.
Give the funding receipt its own assumption
A cash forecast records money when it is expected to arrive or leave, including shareholder investment and non-sales payments. Keep the investment receipt separate from customer collections so its timing can be changed without distorting trading activity. British Business Bank: building a cash-flow forecast.
Use an explicit assumed receipt date and amount. Beside them, record the current status, the conditions still to be met and who will update the assumption. A favourable conversation or draft term sheet should not be presented as cash already available.
Worked example: a two-month delay
Assume a business starts September 2026 with £180,000 of unrestricted cash. Customer receipts less all routine cash payments produce a net outflow of £40,000 each month. A separate £30,000 equipment payment falls in October. The plan assumes £500,000 of investment arrives on 1 November. For this simplified example, there are no other cash movements.
September: £180,000 opening cash − £40,000 net outflow = £140,000 at month-end.
October: £140,000 − £40,000 − £30,000 equipment = £70,000.
November, planned receipt: £70,000 + £500,000 investment − £40,000 = £530,000.
November, delayed receipt: if the investment moves to January 2027, £70,000 − £40,000 = £30,000.
December, delayed receipt: £30,000 − £40,000 = −£10,000. The negative figure represents a funding gap; it assumes no overdraft or other finance is available.
The planned round may be large enough for the growth strategy, yet arrive too late for the existing payment schedule. These month-end figures can also hide an earlier shortfall within a month, so a tight period needs a dated receipts-and-payments view.
Use the result to test decisions
If the business sets an illustrative minimum cash buffer of £20,000, the December gap to that buffer is £30,000, not £10,000. The buffer is a management assumption in this example, not a statutory requirement.
One scenario could move the £30,000 equipment purchase until after the investment arrives. That would improve December cash to £20,000 under these simplified assumptions. Before treating this as a solution, check whether the purchase is contractually committed and whether postponing it would delay sales or a milestone investors expect.
Keep each action and its consequence visible. A later hire might reduce cash spending but also reduce delivery capacity. Do not model the saving while leaving the related growth forecast unchanged.
Test funding instalments and fees separately
A headline investment amount is not necessarily the amount available on the first receipt date. Give each assumed instalment its own amount, expected receipt date and outstanding conditions. Record financing fees in the period they are expected to be paid. This follows the cash-timing approach in the British Business Bank cash-flow guidance.
Illustrative extension of the example above, not client work: keep the October equipment payment and all routine outflows unchanged. Instead of receiving the full £500,000 in November, assume £25,000 arrives on 1 November and the remaining £475,000 arrives in January 2027. Also assume a separate £5,000 financing fee is paid on 1 November. These amounts and dates are invented modelling assumptions, not an offer of finance or a quoted service fee.
- November closing cash: £70,000 + £25,000 first instalment − £5,000 fee − £40,000 routine net outflow = £50,000.
- December closing cash: £50,000 − £40,000 = £10,000. The January instalment cannot cover a December payment unless a separate, available funding arrangement is in place.
- Gap against the illustrative £20,000 buffer: £20,000 − £10,000 = £10,000. Avoiding a negative month-end balance is not the same as maintaining the chosen buffer.
Check whether a forecast receipt is gross or already net of fees. Do not enter a fee-net receipt and deduct the same fee again. Keep restricted money separate from cash available for general spending, and do not count an undrawn or unapproved facility as money already in the bank.
Turn the warning into an action checklist
For each potential cash-buffer breach, record five things: the expected breach date, the proposed response, the person responsible, the time needed to implement it and the evidence required before treating it as available. Work backwards from the breach date to set a decision deadline. A monthly model alone may not establish that exact date; use dated receipts and payments for the tight period.
Keep a no-action scenario beside the proposed response. If moving spending changes delivery capacity, customer receipts or an investor milestone, reflect those effects too. A possible cost deferral or financing discussion remains an assumption until the relevant terms and approvals are confirmed. This checklist applies the emphasis on risk ownership, traceable assumptions and operational milestones in the UK Space Agency’s financial-model guidance, which was written for space-sector investment preparation.
Use KBA’s free cash-flow and fundraising Excel template as a monthly starting point. For staged funding, keep a supporting schedule of gross instalments, fees and net cash by expected receipt date, then reconcile its monthly totals to the forecast. Do not assume that a single funding-date input captures a multi-instalment agreement. A more detailed schedule may be needed; the workbook has not been expanded as part of this article.
Make the financial model explain the business plan
The UK Space Agency’s financial-model guidance, although written for space businesses, highlights useful general principles: traceable assumptions, scenarios, and a clear connection between spending and operational milestones. Apply those principles to the actual drivers of your business. GOV.UK: Financial Model Essentials.
Prepare the inputs: reconciled available cash, customer payment dates, the staffing plan, supplier commitments, equipment spending and the business-specific tax-payment schedule.
Prepare the funding assumptions: the amount, receipt date, any instalments, conditions and fees. Keep uncertain financing distinct from money already received.
Prepare the decision page: the lowest cash balance, first buffer breach, spending changes considered, effect on milestones and the date each decision is needed.
Keep the pitch and model consistent
Your pitch should explain the amount sought and how it will be used, supported by evidence. Use the same funding and spending assumptions in the pitch and the detailed forecast. British Business Bank: getting ready for finance. Before sending the forecast to investors, use KBA’s investor data-room reconciliation checklist to check that the pitch, accounts and model use consistent figures and explain any differences.
KBA offers financial modelling and fundraising support, with valuation support where relevant. Request a modelling consultation with a short summary of your funding timetable, available forecast and next business milestone. Keep bank statements, investor documents and financial identifiers out of the initial form; agree secure document sharing separately. A model helps assess choices; investors and lenders retain their own approval decisions.