A guide on how to win CapSim and understand all of its parts and win the simulation in MBA course

How to recover from Emergency loans in Capsim – Getting out of Emergency loan in a few rounds

I had an article covering Emergency loans and you probably want to check that one out to understand why you and your team got the loan. In general, Emergency loans are caused by Excessive Inventory or Cashflow shortfall such as unfunded investments.

In this post, I am suggesting a few ways to help you get out of struggle. This often takes 1 to 3 rounds depends on how bad situation your team is in. For instance, 2 million loan in round 1 or 2 is not too bad and is usually can be handled in the next round by reviewing your Inventory and Finance tab (just make sure your team has at least 5-8 million in cash at year end). However, if your team got like 15 million at round 4-5 or it is receiving Emergency loans for more than 2 rounds in a row, things got more complicated and need in-depth analysis to explain why you got the loan. Only then your team can improve your financial numbers.

Once again, I strongly recommend you revise my previous post about Emergency loans and look at your Courier report(s) to identify the problem.

– If the reason was your Inventory, you will need to look at your products specifications and marketing strategy. This might take 2 rounds to improve your products and to clear the inventory.

– If unfunded investments caused your loans, borrow more long-term debt and issue more stocks could help. By the way you want to keep your leverage ratio below 2.4 otherwise you will get low score in Balanced scorecard.

If you have any question, just leave a comment below. Thank you very much.