cash-flow
Cash Runway Calculator for Small Business
Cash runway is the simplest health metric every SMB owner should track weekly. If burn outpaces revenue, runway tells you how long until you need a financing decision (or a revenue intervention). This calculator runs both cases — cash-positive businesses get a clean health signal; cash-negative businesses get a verdict matrix tied to specific action timeframes.
Educational estimate based on the inputs you entered — not financial, legal, or tax advice. Verify against your specific situation before acting on this output.
How it works
Methodology
Inputs
- Cash on hand
- Total cash across business operating accounts and reserves.
- Monthly cash burn
- Net cash outflow per month (total cash expenses minus total cash revenue), averaged over the trailing 3 months.
Formula
Runway (months) = Cash on hand ÷ Monthly burn Risk bands: • 12+ months → comfortable • 6 – 12 months → start planning financing now (SMB loan close-times run weeks-to-months) • 3 – 6 months → urgency band — fewer options open • Under 3 months → emergency zone (only fast-deploy products in scope)
Assumptions
- Burn is measured from bank statements, not accounting P&L — non-cash items (depreciation) and timing differences don't matter for runway.
- If you're cash-positive, runway is functionally infinite — the calculator surfaces months-of-buffer instead.
- Doesn't model seasonality — average burn smooths over seasonal businesses but understates risk for ones with concentrated burn months.
Worked examples
Mid-stage cash-burning business
- Cash on hand
- $120,000
- Monthly burn
- $22,000
~5.5 months runway — urgency band. Start financing conversations now; SBA close-times of 45-90 days don't leave room to delay.
Frequently asked
Questions readers ask
What's a healthy cash runway for a small business? +
12+ months is comfortable. 6-12 months means start planning financing now (the typical SMB-loan close-time is weeks-to-months). Under 3 months is the emergency zone — only fast products (working capital, line of credit) work in that window.
What counts as monthly burn? +
Net cash outflow per month — total cash expenses minus total cash revenue. Different from accounting profit/loss (which includes non-cash items like depreciation). Look at last 3 months of bank statements and average the net change.
How is cash runway different from a cash-flow forecast? +
Runway is a single snapshot metric (cash on hand ÷ current burn) — fast to compute, easy to track weekly. A cash-flow forecast projects month-by-month inflows and outflows forward, which captures seasonality, one-time expenses, and expected revenue changes that a flat runway number can't. Use runway as the quick health check; build a forecast before a financing decision or a seasonal dip.
Does cash runway account for incoming financing or receivables? +
No — this calculator uses cash on hand as of today, not expected inflows. Financing you've already closed but haven't drawn, or AR you expect to collect, should be added to cash on hand manually if you're confident in the timing. Treating uncollected AR or unclosed financing as current cash overstates runway and can mask a real shortfall.
How often should I recalculate my cash runway? +
Monthly at minimum, weekly if you're inside the urgency band (under 6 months). Burn rate shifts with seasonality, new hires, and one-time expenses, so a runway number from 2 months ago can be stale. Businesses actively raising financing or managing a downturn should track it weekly alongside cash on hand from the actual bank balance.
This tool is for educational purposes only and is not financial, legal, or tax advice. Final terms and eligibility depend on lender underwriting; consult a tax professional before acting on tax-tool output. ClearValue Lending is a funding platform.