Excess Cash Flow
The portion of free cash flow above mandatory amortization, taxes, defined working-capital reserves, and any contractually-permitted exclusions (capex baskets, restricted-payments capacity, etc.) that the credit agreement deems available for cash-sweep prepayment. The definition of excess cash flow is one of the most negotiated provisions in an LBO credit agreement; sponsor-friendly definitions exclude broader categories (bolt-on M&A reserves, dividend baskets) and lender-friendly definitions narrow the exclusions to keep more cash available for forced paydown.
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Related terms
Accounts Payable · Adjusted EBITDA · Adjusted EBITDA Ex-SBC · ADR · ARPU · Average Length Of Stay
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