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Financial Growth Modeling  & Forecasting Tools

Financial Growth Model for Community
Loan Funds and Non-Profit Enterprises

In its simplest form, a financial model  is a forecast of future revenues and expenses. Projections can be a tricky business as you try to anticipate expenses while trying to predict how quickly your various sources of revenues will grow. These projections will serve to convince your team as well as investors that you have an organization poised for long term self-sufficiency and profitability.

What is a financial growth model?

It is a business planning tool that operationalizes the key assumptions in your strategic plan. 

Modeling Scenarios: The Financial Growth Plan
Turning the Results into a Road Map for Growth

The CDFI Growth Model includes a Financial Growth Plan – a concise narrative that details your strategy for growth. The Financial Growth Model includes:

  • Strategic Objectives and Goals: Long-term ongoing objectives that guide growth and strategic SMART goals over the next 5 years.

  • Staffing Plan: Narrative description with an organization chart, position descriptions and preferred competencies of future staffing based on growth projections.

  • Products & Services: Robust product guidelines, metrics, and fee for service options, etc.

  • Lending Operations Plan: Narrative description of proposed operations over the next 5 years, including the internal organizational units involved in sourcing, evaluating and underwriting, closing, disbursing, servicing and liquidating loans.

  • Portfolio Growth: Volume projections for planned growth of the organization by product and average size.

  • Capitalization Strategy: Sources of capital, both debt and equity.

  • Pro Forma Financial Statements: Projected balance sheet, income statement and statements of cash flows for 5 years, along with the related interest rate, default and prepayment assumptions. 

  • Self-Sufficiency: Strategies to improve self-sufficiency, including increasing loan term, average loan size, loan volumes and introducing new and profitable products to meet market needs.


California FarmLink

Aptos, CA

Nonprofit farmer equity-focused organization, founded in 1992 to link land owners and land seekers. FarmLink began lending as indirect lender in 2005, certified CDFI in 2012. 

Our Process

We review recent audits, financial statements, CDFI Fund Financial Assistance (FA) applications and financiail spreadsheets (if applicable), budgets, staffing, and funding sources. We then come on site to conduct a ‘white board’ session with staff, board members, and members of the bank consortium to develop the assumptions for the growth model.  Within a month, , we deliver a 5-year Growth Model and review the findings with staff.  Once the Growth Model is finalized, we develop the narrative financial growth plan, which serves as the foundation for strategic planning.

Leveraging the Growth Model for your Organization

The Excel-based growth model develops a dynamic set of projections and alternative  growth scenarios to help your team develop estimates of future financial performance. It will enable you to make informed financial decisions about the growth of your organization. The output of a financial model will guide the leadership to make decisions about:

  • Trend Analysis – 4 year historic & 5 year projected

  • Product Level Forecasting, including potential changes in interest rates, spreads, and new product introductions

  • Capitalization planning for operating, loan and reserves

  • Balance sheet and P&L forecasting

  • Forecasts the staff, capital, and operating resources needed to achieve the assumptions in your strategic plan

The Financial Growth Model translates your  organizational goals into specific targets.

It clearly defines mission-driven success and establishes milestones for gauging progress. The goal of the financial model is to answer the following questions:

  • What is the underlying business model for your organization that will lead it to impactful growth? What are the options for revenue generation?

  • Given a defined set of assumptions for growth, what is the best strategic path in moving towards a sustainable business model?

  • What is the sequencing of human resources, capital and operations, needed to achieve deployment goals in the most efficient and effective manner?

Why does my CDFI need a financial growth model?

A financial growth model is a blueprint for how a fund grows from level A to level B. It uses historical data and analyses of industry trends to spell out next moves and predict long term outcomes. Instead of trying to manage whatever comes, a growth model puts the team in control so they can more predictably (and sustainably) achieve their CDFI’s deployment and impact goals.

The Financial  Growth Model simplifies the preparation of proposals for financial institutions and other impact investors

Stay in touch.

We're here to help answer any questions you might have about our work or just to chat. We look forward to hearing from you!

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