Chirayuthchai TraisaengsatheanStrategic Finance for Property Development
THEN

Monthly funding gap

Compares receipts under down-payment instalment terms with construction disbursements to find the Peak Funding gap and the month in which it occurs

Read with Real Estate Project Strategic Financial Management Handbook: A Practical Guide · Part 5
The figures entered are hypothetical examples. Every field can be edited.

THB million
% of GDV; the remainder is not counted as cash receipts
Month 1 is the first month of the project
months; average sales are equal each month
% of selling price; the remainder is received in the transfer month
months; instalments start in the month of sale
Must not be earlier than the month construction is completed
THB million, paid in month 1
THB million
project month
months
Pattern for spreading the budget over time. Formulas are in the Assumptions section.
Peak Funding Gap–
Summary of results
Peak month–
Total receipts–
Total payments–
Cumulative cash at project end–

Blue line: cumulative cash. Gold dot: month of Peak Funding gap

Monthly cash flow (THB million)
MonthReceiptsPaymentsNetCumulative

Negative values are shown in red. Row underlines: month with the deepest cumulative deficit (Peak Funding gap)month in which the cumulative balance turns positive again

Results are calculations for learning purposes only. The figures entered are hypothetical examples, not real project data, and are not investment advice.

How to use

  1. Enter the sales value, sales pace and buyers' payment terms
  2. Enter the initial costs, construction budget, start month and disbursement pattern
  3. The Peak Funding gap is the deepest negative point of cumulative cash, which must be financed from equity or debt

Assumptions and limitations

  • Sales are spread evenly across the months. Each buyer pays equal down payment instalments from the month of sale. Instalments falling after the transfer month are collected in the transfer month
  • The entire remaining balance is received in the transfer month, and all buyers are assumed to transfer on schedule
  • The construction budget uses the same formula as the Construction S-curve tool
  • It excludes interest, selling and administrative expenses, Specific Business Tax (SBT), transfer fees, retention and contract cancellations, so the actual figure is usually higher than this one
The results are only an illustrative calculation. Use the project's actual monthly cash flow statement when negotiating facilities

Tools to use together