Cash Sweep

The use of cash above a minimum balance to prepay debt, usually the term loan B, before it can be distributed. Credit agreements set the share through an excess cash flow sweep that often steps down as leverage falls; in a model it runs after interest, tax, scheduled amortisation and the revolver.

Where Cash Sweep comes up

How to Build a Three-Statement Model That Actually BalancesThe build order matters more than the formulas. Get the sequence right and it balances on the first try.Read the guide — 13 min How to Build an LBO Model: The Build Order That Survives a Modelling TestUnder a 90-minute clock, the build order is the difference between a returns number and a half-finished model.Read the guide — 13 min The Private Equity Modelling Test: What to Expect and How to PrepareThe formats by fund type, what graders open first, and a two-week preparation plan that actually fits around a banking job.Read the guide — 9 min

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Credit and restructuring models

Related Credit terms

Maturity Wall Loss Given Default (LGD)EBITDA Cushion Second Lien Fixed Charge Coverage Ratio (FCCR)Pari Passu

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