What a loan balance roll-forward is
A roll-forward starts with what you owed at the beginning of a period, adds any new borrowing, takes off the principal you repaid, and arrives at what you owe at the end. The ending balance of one period is the beginning balance of the next. Interest does not change the balance on a loan paid in level installments, because each payment first covers that month's interest and only the rest reduces what you owe.
In a statement of cash flows the same movements become cash lines. Proceeds from borrowing are a financing inflow and repayments of principal are a financing outflow. Under US GAAP, cash paid to lenders for interest is an operating outflow, so interest paid sits in operating activities, not financing. Other frameworks, such as IFRS, treat interest differently, so confirm the treatment with your accountant.
Worked example: $150,000 over seven years, forecasting a fiscal year
A business borrowed $150,000 at 9% a year over seven years, paid monthly at $2,413.36. After 18 payments it has repaid $24,729.74 of the principal, so the beginning balance of the next 12-month period is $125,270.26.
Over the next 12 months it repays $18,434.12 of principal and pays $10,526.22 of interest, $28,960.34 of cash in total. The ending balance is $106,836.14, with 54 scheduled payments left. Check: $125,270.26 less $18,434.12 is $106,836.14.
For the first year of the same loan, set the months repaid before the period to zero. The beginning balance is then the full $150,000.00, the principal repaid is $16,114.30 and the interest paid is $12,846.05.
How the beginning balance is worked out
The calculator takes the original amount, the yearly note rate and the term, and finds the level monthly payment that pays the loan off exactly. It then applies each payment in turn for the months you say have already been paid. Each month the interest is the balance multiplied by the yearly rate divided by 12, and the rest of the payment reduces the balance. The balance after those payments is the beginning balance of your period.
If you only want the balance on a given day, with the principal and interest paid so far, use the remaining loan balance calculator.
New borrowing during the period
If the business draws more cash at the start of the period, it is added to the beginning balance and the payment is recalculated over the months that are left, so the loan still ends on its original date. After 30 payments of a $150,000 loan at 8.25% over seven years, the beginning balance is $106,007.35. Drawing a further $50,000 and forecasting 12 months gives a payment of $3,468.21 a month, principal repaid of $29,860.29, interest of $11,758.27 and an ending balance of $126,147.07.
On the statement of cash flows that period shows $50,000.00 of proceeds from borrowing, $29,860.29 of principal repaid and $11,758.27 of interest paid.
Extra payments and the end of the loan
A voluntary extra payment reduces the balance faster. On a $400,000 loan at 7.5% over 15 years, with $1,000 extra every month after 60 payments and a 36-month forecast, the principal repaid is $110,863.67, the interest is $58,626.11 and the loan falls from $312,383.67 to $201,520.00 by the end of the period.
A period cannot run past the end of the loan. The calculator rolls forward scheduled payments, so it can only forecast the months the loan still has left.
Other ways to read this question
This page works forward from the original loan terms. If you already know the ending balance and want the beginning, add back the principal repaid and take off any new borrowing, which is the same equation turned round. If you know the payment and want to find how much was borrowed, work back from the payment instead, and if you want the whole payment schedule, an amortization calculator lists every month.
To find how much a payment would support, use the commercial loan amount calculator.
What this estimate leaves out
The model uses level monthly payments, a fixed nominal rate and interest on the balance each month. It does not model daily interest, a variable rate, payment deferrals, fees added to the balance, or interest charged on the average of the opening and closing balances, which some forecasting models use instead. Your lender's statement is the record that counts, so compare the beginning balance with it before relying on a forecast.
For the payments and cost of a short-term loan, see the working capital loan calculator.
Use the right country page
This page stays in dollars and uses US terms: statement of cash flows, financing activities and a yearly note rate. The country choices above the inputs open separate local pages. Choosing United Kingdom opens the calculator for a cash flow forecast, which uses UK wording. The inputs reset and amounts are not converted.
Inputs for the loan beginning balance calculator
Original loan amount
How much was borrowed when the loan started.
Interest rate
The yearly note rate. Interest is charged monthly at one twelfth of it.
Original term
How long the loan was set up to run, in years, up to 30.
Months repaid before the period
Level monthly payments already made when your period starts. Zero if it starts with the loan.
Months in the period
The length of the period you are rolling forward, such as 12 for a fiscal year.
New borrowing at the start of the period
Extra cash drawn on the loan at the start. Payments are recalculated. Enter zero for none.
Extra payment each month
A voluntary amount paid on top of the scheduled payment every month. Enter zero for none.
CALCULATOR QUESTIONS
US loan beginning balance cash flow calculator questions
How do you calculate the beginning loan balance?
Apply each payment already made to the original loan: interest is the balance times the yearly rate divided by 12, and the rest of the payment reduces the balance. After 18 payments of a $150,000 loan at 9% over seven years the balance is $125,270.26.
What is the formula for a loan balance roll-forward?
Beginning balance plus new borrowing less principal repaid equals ending balance. Interest is shown separately because a level payment covers it first.
Where does a loan go on the statement of cash flows?
Proceeds from borrowing and repayments of principal are financing activities. Under US GAAP, cash paid for interest is an operating activity.
Is the ending balance of one period the beginning balance of the next?
Yes. In the example the ending balance of the first forecast year, $106,836.14, is the beginning balance of the next.
What happens if I borrow more during the period?
The new amount is added to the beginning balance and the payment is recalculated over the months that are left, so the loan still ends on its original date.
Why must the period fit inside the loan term?
The calculator rolls forward scheduled payments, so it can only forecast the months the loan still has left. Shorten the period or enter fewer paid months.
What happens when I change country?
The United Kingdom option opens the separate calculator for a cash flow forecast, in pounds, with UK wording. Your inputs are reset rather than converted.