distribution center planning

2-9. Bank loan (borrowing) repayment simulation

The entire 3 billion yen construction cost"1.5% interest rate, 20-year repayment (equal principal and interest repayment)"This is a 10-year cash flow comparison between a simulation of repayment when procured with a bank loan and a rental operation (1,800 tsubo, approximately 9 million yen per month).

1. Bank loan repayment simulation

Borrowing conditions

Total amount borrowed:3 billion yen (3,000,000,000 yen)
Borrowing conditions:Fixed interest rate 1.5% / Repayment period 20 years (240 months) / Equal principal and interest repayment

Repayment item	Amount (estimate)	remarks
Monthly repayment amount (principal + interest)	14.48 million yen / month	Of which, the principal is approximately 10.73 million to 12.28 million yen, and the interest is approximately 3.75 million to 2.2 million yen.
Annual repayment amount	173.76 million yen/year	12 months worth
Cumulative repayments over 10 years	1,737.6 million yen	After 10 years (10 years remaining)
Total interest payment (all 20 years)	475.2 million yen	Total repayment over 20 years: 3,475.2 million yen
Loan balance at the end of 10th year	Approximately 1,618 million yen	Approximately 46% of the principal amount (3 billion yen) has been repaid

2. 10-year real cash out comparison table

In the case of "loan repayment," the monthly payment amount is replaced by "principal and interest repayment," but fixed asset tax and repair and maintenance costs for land and buildings are added.

*Comparison conditions: Rent is 1,800 tsubo × 5,000 yen/tsubo (rent + common area fee) =9 million yen per month(Annual amount: 108 million yen)

Capital outflow/cost items	① In-house construction (3 billion loan, 20 year repayment)	② Rental property (used for 10 years)	Difference/remarks
Initial own funds (CAPEX/deposit)	0 yen(Assuming full loan)	120 million yen	② 6 months security deposit (recoverable) + C construction cost
Monthly fixed payment (10 years cumulative)	1.738 billion yen(Repayment amount)	1.080 billion yen(Rent + common area fee)	① 14.48 million yen per month × 120 months ②9 million yen per month x 120 months
Fixed asset tax/city planning tax (10 years)	Approximately 280 million yen	0 yen	①Public charges for land and buildings
Maintenance, repair, and insurance costs (10 years)	Approximately 150 million yen	Approximately 60 million yen	① External walls, roof, inspection, fire insurance, etc.
[Total cash out over 10 years]	2.168 billion yen	1.260 billion yen	Difference in cash outflow: ① +908 million yen more
Asset amount after 10 years (real estate value)	1.500 billion yen(Land included value)	0 yen	① Assuming that the land price is the same as when you bought it.
Debt amount after 10 years (remaining loan)	▲ 1.618 billion yen(loan balance)	0 yen	① Repayment remaining for 10 years
[Impact of net worth in 10 years]	▲ 118 million yen	0 yen	Assets 1.5 billion yen − Liabilities 1.618 billion yen
[“Actual burden amount” for 10 years]	2.286 billion yen (Total outflow 2.168 billion + net asset deficit 118 million)	1.260 billion yen	Actual burden including movement of net assets

3. Key points of management cash flow

① Cash flow aspect until the 10th year (rental is advantageous)

・Monthly cash outflow:

Loan repayment (in-house):Repayment 14.48 million yen + maintenance, taxes, etc. approximately 3.5 million yen =Approximately 18 million yen/month
Rental properties:Rent + common area fee =Approximately 9 million yen/month

・ Conclusion:For the first 10 years, it is better to build in-house (loan repayment).Approximately 9 million yen per month (more than 100 million yen per year) will generate extra cash.If you don't have enough cash for your main business, renting is safer.

② Reversal scenario from 11th to 20th year

・Transformation in the 20th year (after paying off the loan):

If the loan (annual repayment of 174 million yen) is paid off in the 20th year, the cost from the 21st year onwards will beApproximately 35 million yen per year (tax and maintenance costs only = approximately 2.9 million yen per month)decreases rapidly to.
On the other hand, renting even after 20 years108 million yen per year (+ rent revision risk)will continue to occur forever.

③ Accounting/tax aspects (impact on income statement)

of borrowed money“Principal repayment portion (approx. 10.7 million yen per month)” is not an expense.(Cash will decrease, but it will not become an expense on P/L).
What can be expensed on P/L“Building depreciation costs (approximately 60 million to 75 million yen/year)”and“Interest paid (approximately 44 million yen/year in the first year)”, and property taxes and repair costs only.
Therefore,“Although there is a surplus (taxes are incurred), there is no cash left (a surplus account)”This phenomenon is likely to occur, so you need to be careful when planning your finances.

4. Comprehensive judgment

When focusing on “speed of business expansion” and “capital efficiency (ROIC)”

Cash out in the first 10 years“Rental” less than 900 million yenYour business will grow faster if you choose , and use the 100 million yen per year you save for "additional material handling equipment (automated equipment)," "expansion to other locations," and "product development and recruitment."

When focusing on "ultra-long-term fixed cost reduction over 20 years" or "building company assets"

Annual fixed costs will be significantly reduced after full payment (from 21st year onwards)“In-house construction (loan)”will be the final victory.This is a strategy when you have sufficient funds on hand or bank loan lines.

← Return to menu list

Logistics facility planning and improvement | Related knowledge