Financial budget

Before starting your financing budget, draw up an  investment budget . This lists all expenditure on business assets. You include the total budgeted amount in your financial budget. The financial budget makes clear how you are going tp fund assets and investments. What financial resources you have yourself and what you need to find external financing for. 

Make your financial budget in 3 steps

1. Equity

Calculate the amount you can bring into your business yourself, such as savings. Do you bring in company assets that you already own privately? For example, a company car or a computer? Determine the value and add it to your cash contribution. Together, this is your company's equity . In a financing application, subordinated loans also count as equity capital. For example, a subordinated loan is a loan from family or friends.

Note: are you starting a general partnership (vof) with multiple entrepreneurs? Then you add up the contributions of each partner. In a private limited company (bv), the contribution of all shareholders is equity.

2. Determine debt

Determine the amount of outside financing you need. Outside financing, also known as loan capital, is money that you borrow from business partners, such as suppliers or banks. 

Loan capital is debt. You have short-term debt and long-term debt. The boundary between long and short-term is 1 year. Examples of short-term debt are supplier credit, overdrafts and taxes you have to pay. Long-term debts are, for example, a loan for inventory or a mortgag

3. Solvency

Calculate your solvency. Solvency is the ratio of your equity to the total required capital. So, how much equity do you have and how much do you need in total? This indicates your company's ability to pay your debts in the long term. A financier requires that a starting entrepreneur contributes equity, usually at least 30%. In certain sectors, such as the hospitality industry, this can be as high as 50%. With a well-thought-out plan, a financier can sometimes make an exception and offer 100% funding. This means you do not have to contribute equity.

Example financial budget

Solvency is calculated by dividing equity by total assets. You multiply the result by 100%. In this example, it is (25,000 / 47,000) x 100 = 53.2%.

Call in help

Do you want help preparing your financial budget? You can engage a bookkeeper or accountant via the Dutch Association of Accountants and Tax Experts NOAB (in Dutch) or the Royal Netherlands Institute of Chartered Accountants NBA.