A financing plan is a forward-looking financial document that, for each year of a projection horizon (typically 3 to 5 years), sets out all uses of funds (investments, debt repayments, dividends) and sources of funds (operating cash flow, borrowings, equity contributions, asset disposals) of a company. It ensures that available resources permanently cover financing needs and identifies any risk of cash flow shortfall.

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In the context of a business acquisition or LBO, the acquisition holding's financing plan is the central document of the banking file: it demonstrates that dividends upstreamed from the target cover the debt service (DSCR), fund development investments and generate sufficient returns for shareholders. Its credibility depends on the quality of the financial due diligence and the growth assumptions adopted.

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A robust financing plan distinguishes: operating cash flows (EBITDA, working capital movements, capex) that fund senior debt repayment; financing flows (new borrowings, equity contributions, dividends) that manage the balance sheet structure; and investment flows (add-on acquisitions, asset disposals). It must be stress-tested to validate its resilience.

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Example: a SME LBO financing plan (CHF 8.0 million EV) shows: Year 1 — EBITDA CHF 1.4M, senior debt repayment CHF 0.8M, interest CHF 0.2M, capex CHF 0.3M, residual free cash flow CHF 0.1M. The DSCR of 1.40x validates the structure's sustainability over the holding period.

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At Hectelion, we build robust and bankable financing plans for acquisition and transfer transactions in France and Switzerland.