2 min read
Definition
Early warning indicators are metrics that reveal building financial stress — lengthening debtor days, shrinking cash, rising facility utilisation, or narrowing covenant headroom.
In plain terms
They are the dashboard warning lights. Businesses that survive shocks are the ones that watch these and act while options are cheap.
Why it matters for your company
Reviewing early warning indicators monthly lets you arrange finance or a forbearance before a crunch forces expensive choices. Build them into your forecast and monitor with the cash runway calculator.
Related reading
Cash flow forecast
A cash flow forecast projects money in and out over coming weeks and months, revealing the low points before…
Read →Utilisation rate
The utilisation rate is how much of your facility you are using — drawn ÷ limit. Consistently high…
Read →
Headroom — Business Finance Glossary
Headroom is the margin between a borrower's actual financial performance and the threshold at which a…
Read →
Forbearance plan
A forbearance plan is a temporary easing of terms — a payment holiday, reduced instalments or extended term —…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.