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3-Statement Model

The PSC Cycle: All three models start with $300K to buy 3 machines. The difference? What happens to your payments.

Grant: No payments, but no more funding.Loan: Payments go to the bank (gone forever).PSC: Payments cycle back as NEW funding for MORE machines!

Parameters

$300K
$100K
25%
5
5%
80%
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Machines Owned Over Time

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All start with 3 machines. After 5 years: Grant & Loan still have 3, PSC has 7 (+4 from recycled funding)

Cumulative Total Value

(assets + retained cash over time)
Total Value = Assets owned + Cash retained.PSC accelerates because pay-forward funding cycles back as MORE machines!
Machines Owned (Year 5)
3
Grant
3
Loan
7
PSC
Total PSC Funding Received
$700K
+$400K from recycling
PSC Final Equity
$825K
Net worth (assets + cash, no debt)
Equity Multiplier
1.2x
PSC vs Grant equity

The PSC Recycling Effect

1. Earn Revenue

Your 7 machines generate $150K/year

2. Pay Forward (80%)

Total paid forward: $420K goes back to PSC fund

3. Receive More Funding

Fund gives you +$400K for new machines!

Unlike loans where repayments disappear to the bank, PSC payments cycle back as new funding. The more you earn and pay forward, the more machines you can acquire—creating a virtuous cycle of growth.

Income Statement (5 Years)

Line ItemGrantLoanPSC
Funding Received
Total Funding (initial + recycled)$300K$300K$700K
Operating Revenue
Gross Revenue from Assets$375K$375K$525K
Deductions
Interest Expense$0-$75K$0
Pay-It-Forward (funds recycling)$0$0-$420K
Net Position (Equity)$675K$300K$825K

Cash Flow Statement

Line ItemGrantLoanPSC
Operating Activities
Gross Revenue from Assets$375K$375K$525K
Interest Payments$0-$75K$0
Pay-It-Forward$0$0-$420K
Net Operating Cash$375K$300K$105K
Financing Activities
Initial Funding Received$300K$300K$300K
Principal Repayment (due at end)$0-$300K$0
Investing Activities
Machine Purchases-$300K-$300K-$700K
PSC Recycled Funding (machines)$0$0$400K
Ending Cash Balance$375K$300K$125K
PSC Cash Flow Explained: You earn $525K in revenue, pay forward $420K, keeping $105K. That pay-forward comes BACK as $400K in new machine funding. Final cash = Net Operating ($105K) + unspent pool = $125K.

Balance Sheet (End of Year 5)

Line ItemGrantLoanPSC
Assets
Fixed Assets (3/3/7 machines)$300K$300K$700K
Cash (Retained Earnings)$375K$300K$125K
Total Assets$675K$600K$825K
Liabilities
Debt Outstanding$0$300K$0
Equity
Net Worth (Assets - Liabilities)$675K$300K$825K

Key Insight: Where Does Your Money Go?

Grant Model

No payments required. But funding is one-time only—you're stuck with 3 machines forever.

Loan Model

You pay $75K in interest. That money goes to the bank and is gone. Plus you owe $300K in principal.

PSC Model

You pay forward $420K. That money cycles back as new funding—you end up with 7 machines and zero debt.