Glossary
Stress test
Deliberately making the numbers worse, higher rates, lower revenue, slower collections, to check the business still stands.
In plain English
A stress test asks whether the business survives a defined bad event: rates two or three points higher, revenue down 10% or 20%, a major customer paying late. The test is not a prediction. It is a check on how much abuse the position can take before something gives.
Good stress testing produces a verdict, not just a table: pass, tight, or fail, at each level of stress. That verdict is what turns a spreadsheet into a decision.
Why a lender cares
Lenders stress test every application whether you do or not. When the file arrives already stress-tested, with each result stated plainly, the assessor's job shrinks and the borrower's credibility grows. Every worksheet we deliver carries stress tests on earnings and rates with a clear verdict on each.
Where this term takes you
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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