2 min read
Definition
Free cash flow is the cash left from trading once the unavoidable costs of running the business are met. Unlike profit, it reflects real money in the account, which is why it, not the profit line, drives an affordability decision.
Why it matters
Free cash flow is the raw material of the cover ratio — the cash a lender divides by your repayments. Improving it lifts what you can borrow. See improving cash flow before borrowing.
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