Glossary
Sensitivity analysis
Re-running the numbers with one input moved at a time, usually rates or revenue, to see exactly where the deal starts to break.
In plain English
Sensitivity analysis changes one assumption at a time and watches what happens to the result. Move the interest rate up in steps, or revenue down in steps, and the model shows exactly where covenants breach and the deal stops working.
It is different from scenario modelling, which moves several drivers together to tell a coherent story. Sensitivity isolates a single lever, which is precisely what makes it useful: it tells you which assumption the whole deal depends on.
Why a lender cares
Every credit paper contains a sensitivity table, because the assessor's job is to find the breaking point before recommending the deal. A submission that includes its own sensitivity grid, honestly built, has answered the question before it was asked. Ours are tested well above current rates.
Reading up because a deal or a facility is on the table? One call with Nicholas gets you a straight read on your numbers, free.
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