An approved staged loan may arrive after the payment it must fund

A $900,000 financing approval does not place $900,000 in the operating account. If money is released in stages, the useful amount on a particular date depends on the relevant conditions and processing time. List each draw, the earliest request date, required evidence, funding deadline and point at which unused capacity expires.

Distinguish requirements satisfied at closing from those repeated for later advances. For example, the publicly filed West Bay BDC credit agreement requires specified representations, absence of default and supporting notices for credit extensions. Your agreement may use different conditions. Have counsel identify which provisions can prevent a planned draw even after the facility is signed.

Use a hypothetical equipment project with $150,000 of available company cash. The assumed facility provides $300,000 at closing, $250,000 after an inspection expected on day 30 and $350,000 at a later milestone. A supplier requires $400,000 on day 20. No other cash movements are included in this isolated example.

The business starts with $450,000 after the first draw and falls to $50,000 when it pays the supplier. If management needs to preserve $100,000 for operations, the day-20 bridge requirement is $50,000. Receiving another $250,000 on day 30 does not remove the earlier shortfall. The total approved facility exceeds the invoice while the timing still fails.

An inspection report may depend on installation, and installation may depend on paying the supplier. Trace those dependencies before accepting the structure. Ask whether the draw can precede delivery, whether a supplier will accept different payment terms or whether the company needs another supported funding source. Do not solve the spreadsheet by moving a contractual payment without agreement.

Name the owner of each certificate, permit, valuation, invoice or operating result required for release. Include external parties and their expected lead times. A deadline to submit evidence is different from a deadline for the lender to review and transfer money.

Check whether a rejected submission can be corrected before availability expires. Ask how a partial completion or disputed milestone affects the amount released. Put any proposed concession in the negotiation list until it is actually agreed.

Delay one draw while leaving committed supplier payments in place. Show the lowest cash balance, the additional bridge amount and the period for which it is needed. A probability-weighted receipt cannot pay a bill in the scenario where the funds have not arrived.

If early drawing is permitted, compare its interest and other costs with the liquidity benefit. Check restrictions on where proceeds may be held and used. If a separate bridge is considered, ask whether it is allowed under the facility and what must repay it. An assumed bridge can create another consent problem.

Extend the downside through a missed milestone, not merely a short administrative delay. Determine which expenditures can still be stopped and what the company would owe if later advances never became available. This identifies commitments that depend on performance the business has yet to achieve.

Present management with the next irreversible payment and the cash expected to cover it. Identify which draw conditions are complete, which depend on another party and which remain assumptions. Choose a review point before the supplier commitment becomes unavoidable.

At each stage, update the evidence and dates before releasing the next spending authorization. Keep the signed financing terms beside the cash schedule. The approval should establish a feasible sequence from company cash to completed milestone to lender receipt, including any gap between them.