In this case, we can see the company is expected to struggle a bit out of the gate in terms of margin, and then eventually stabilize. Defaulting on the loan early because of a bumpy road after an acquisition or turnaround is not great for any of the stakeholders. Based on the bank's conservative assumptions, the cash flow analysis has revealed that the amount of debt the company can handle and pay back was based on each year's free cash flows. However, depending on the deal, the credit, appetite of the market, some banks will adjust the amortization schedule to allow some breathing room in the early years. This is done by looking at the debt capacity analysis that was previously done based solely on cash flows, and massaging the principle payback slightly. Here, the amortization schedule was shaved slightly in the early years to allow for some more room in case the company needs it. This is where sensitivities come in handy. The bank has properly flexed the numbers and has developed a reasonable bank case. It can be fairly certain that the cash will be there when needed. This can be risky if the credit turns bad or worse in the later years. If we look closely, the early breathing room did come at the expense of less cash available in the outer years. In fact, in years three to five, the debt service is higher than the bank case cash flows. Now the bank case is typically lower than the company's forecast, so normally this is not a problem. However, a bank will never allow this situation to happen without a cash sweep in place to pick up any cash that is accumulating in the earlier years of the loan to pay the loan back in advance. This is called prepaying. So if the cash flow is actually better than anticipated in the earlier years, the bank has a claim on that cash as well. Note well that in this example, the overall interest paid on the loan will be slightly higher, which is not a bad thing for the bank. We'll look at an example of this in the workouts.