Capital Requirement Modeler

Calculate the required initial principal (P0) to cover expenses, pay a target monthly draw, and achieve a target principal growth rate.

Parameters

Basic Parameters

%

e.g., 0.20 for 20% monthly return

%

e.g., 0.05 for 5% monthly default

%

e.g., 0.95 for 95% utilization

%

e.g., 0.10 for 10% annual APR

%

e.g., 0.01 for 1% monthly fees

Expenses

$

Total monthly expenses

Format: Name:Amount:Frequency (d/m/q/y)

$

Desired owner's draw per month

$0 $20,000 $100,000

Draw + Growth Parameters

%

e.g., 0.08 for 8% monthly growth

0% 10% 50%

Simulation Parameters

Loan term in days

Select simulation time period

Capacity Constraints (Optional)

$

Maximum new loans per day

Maximum number of new loans per day

$

Average size of a single loan

Calculations update automatically as you change values

Force full recalculation with server-side accuracy

Results

Scenario Explorer ⓘ

Parameter Sensitivity ⓘ

Return Rate Impact: -
Default Rate Impact: -
Utilization Impact: -

Scenario Comparison ⓘ

Conservative: -
Moderate: -
Aggressive: -

💡 Pro Tip: Use the sliders to explore different scenarios and see how your required initial capital changes.

🔍 Explore: Try extreme values to understand the boundaries of what's possible, even if not practical.

Understanding the Mathematics

Net Monthly Return (r_net)

The actual return after defaults, costs, and fees.

r_net = (u × r_m) - c_m - fees_m

Where c_m = (1 + c_a)^(1/12) - 1 (monthly cost of capital)

Initial Principal (P0)

The starting capital needed to cover expenses and achieve growth targets.

Feasibility

Scenarios are marked as infeasible when they require extremely high initial principal or result in very small withdrawable amounts, but calculations still proceed to show the trade-offs.