Executive Summary
- Fund Flow tracks sources and uses of funds across the year, not just opening and closing balances
- It reconciles whether the loan amount is actually being deployed as claimed elsewhere in the file
- This form catches inconsistencies the Balance Sheet and P&L alone can't reveal
- It is frequently the most overlooked form despite its diagnostic value
Sources and Uses, Explained
The Fund Flow Statement tracks where money came from during the year (sources — profit, depreciation add-back, fresh borrowing, capital infusion) and where it went (uses — capital expenditure, working capital increase, loan repayment, dividend). Unlike the Balance Sheet, which shows a static position at year-end, Fund Flow shows the actual movement of funds across the entire period.
What This Form Actually Reconciles
This form specifically reconciles whether the proposed loan amount, once added as a source of funds, is genuinely being deployed for the stated purpose — capex, working capital — rather than disappearing into an unexplained use elsewhere. It is, in effect, a sanity check on whether the rest of the CMA data tells a coherent, internally consistent financial story.
Why It's the Most Overlooked Form
Many self-prepared CMA submissions treat Fund Flow as a formality, populating it loosely after the other forms are complete rather than building it as a genuine reconciliation check. This is a missed opportunity — a properly prepared Fund Flow Statement is one of the clearest signals to a credit officer that the entire financial submission has been thought through coherently, not assembled piecemeal.
What Credit Officers Specifically Check Here
Experienced credit officers check whether the proposed loan, once treated as a source of funds, is matched by a corresponding, specific use that aligns with the stated loan purpose — a term loan claimed for machinery purchase should show a corresponding capex use of roughly that amount, not get absorbed vaguely into general working capital. See our guide on means of finance in your DPR for how this connects to the broader project funding narrative.