Cash Management Trigger Cost Calculator

CM triggers redirect cash flow from borrower.

Monthly NOI

Monthly debt service

Trigger duration months

Discount rate %

Sweep cost (NPV)

$31,111

Monthly excess swept

$35,000

Total swept

$420,000

How the math works

Excess = NOI − debt. Total swept = excess × months. Cost = NPV impact of delayed distribution.

$35k × 12 = $420k swept. NPV impact ~$31k over 1 year at 8%. Real cost in strategic and opportunity terms.

How to Use

Enter monthly NOI.
Enter trigger DSCR.
Enter current DSCR.
Enter trigger duration months.
Read sweep cost.

Frequently Asked Questions

What's cash management?

Lender requires all property cash flow through controlled account. Pays debt service, reserves, operating expenses. Remaining swept to LL-controlled reserve. Borrower cannot distribute until cured. Triggered on DSCR drop, LTV exceedance, covenant violation.

Sweep mechanics?

100% cash deposit. Disbursements only with lender approval. Monthly sweeps to reserve after operating. Typical: DSCR < 1.20 for 2 consecutive quarters. Cure: return to >1.35 for 2 quarters. Sweep stops, normal flow resumes.

Cost impact?

Distribution deferral (NPV cost at discount rate). Administrative burden. Principal paydown or rate increase often required. Total financial impact 1-3% of loan balance in material covenant events. Significant strategic damage (future refi difficulty).

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.