Example 4: Determine a supplier 0% finance scheme contribution, combined with a deferred settlement

This example demonstrates how to calculate an equipment supplier's contribution to the borrower's finance costs in 0% finance offers, and incorporates a settlement deferral by the third-party finance company.

Overview

This example illustrates the combination of two financial concepts:

• 0% finance: These products can be characterised as containing disclosed and non-disclosed cash flows.

  • The disclosed cash flows, which a borrower is aware of, are the full retail cost (advance) of the financed item and the payment cash flows which contain principal only; the sum of payment cash flows equals the item cost (advance), resulting in an effective 0% interest rate for the borrower.
  • The non-disclosed cash flows are the direct transactions between supplier and lender, usually a cash discount to offset the financing costs of the lender.

• Deferred settlements: This is where an equipment supplier with close ties to a finance company, allow them to defer payment for the equipment purchase to facilitate the pass on of benefits like reduced payments or interest to borrowers.

Code

This example solves for an unknown supplier contribution to cover the finance cost of a $10,000 car purchase with six monthly capital payments. The calculation is from the lender viewpoint, and includes a one month supplier settlement deferral, so the calculation is performed using values dates defined by the each Series valueDateFrom date.

Notes:

• SeriesAdvance: The postDateFrom date is the documented date of the contract, and valueDateFrom is the date of supplier settlement (undisclosed to borrower)

• SeriesPayment's:

  • The borrower's documented payments are the deposit of $4000.00 and 6 x $1000.00 monthly payments, the sum equaling the advance amount (hence 0% finance).
  • The supplier's undisclosed contribution to cover the finance company's return on capital is the unknown to solve.

Deferred settlements require calculations to be undertaken using value dates, so we pass usePostDates: false to the chosen Day Count Conventions, e.g. US30U360(usePostDates: false). This ensures the calculation is performed from the lender's perspective.

After determining the supplier contribution we show how to verify the lender's implicit return (IRR), again using usePostDates: false, and display the result schedule from the lender's perspective i.e. in value-date order.

import 'package:curo/curo.dart';

void main() async {

  // Create a calculator instance and define cash flow series
  final calculator = Calculator()
    ..add(SeriesAdvance(
      label: 'Cost of car',
      amount: 10000.0,
      postDateFrom: DateTime.utc(2026, 1, 5),
      valueDateFrom: DateTime.utc(2026, 2, 5),
    ))
    ..add(SeriesPayment(
      label: 'Deposit',
      amount: 4000.0,
      postDateFrom: DateTime.utc(2026, 1, 5),
    ))
    ..add(SeriesPayment(
      label: 'Supplier contribution',
      amount: null,
      postDateFrom: DateTime.utc(2026, 2, 5),
    ))
    ..add(SeriesPayment(
      numberOf: 6,
      label: 'Instalment',
      amount: 1000.0,
      postDateFrom: DateTime.utc(2026, 2, 5),
    ));

  // Solve for the unknown and validate rate
  final convention = const US30U360(usePostDates: false); // by value date

  final supplierContribution = await calculator.solveValue(
    convention: convention,
    interestRate: 0.050, // lender return on capital
    startDate: DateTime.utc(2026, 1, 5),
  );

  final lenderIrr = await calculator.solveRate(convention: convention);

  // Optionally create an amortisation schedule and display results
  final schedule = calculator.buildSchedule(
    convention: convention,
    interestRate: lenderIrr,
  );

  print('Supplier contribution: \$${supplierContribution.toStringAsFixed(2)}');
  print('Lender\'s IRR: ${(lenderIrr * 100).toStringAsFixed(2)}%\n');
  schedule.prettyPrint(convention: convention);

Console output:

Supplier contribution: $61.90
Lender's IRR: 5.00%

value_date   label                          amount        capital       interest  capital_balance
-------------------------------------------------------------------------------------------------
2026-01-05   Deposit                      4,000.00       4,000.00           0.00         4,000.00
2026-02-05   Cost of car                -10,000.00     -10,000.00           0.00        -6,000.00
2026-02-05   Instalment                   1,000.00       1,000.00           0.00        -5,000.00
2026-02-05   Supplier contribution           61.90          61.90           0.00        -4,938.10
2026-03-05   Instalment                   1,000.00         979.42         -20.58        -3,958.68
2026-04-05   Instalment                   1,000.00         983.50         -16.50        -2,975.18
2026-05-05   Instalment                   1,000.00         987.60         -12.40        -1,987.58
2026-06-05   Instalment                   1,000.00         991.72          -8.28          -995.86
2026-07-05   Instalment                   1,000.00         995.86          -4.14             0.00

Cash Flow Diagram

The diagram below visualizes the cash flow dynamics of a borrower's $10,000 interest-free loan with a deposit and six monthly instalments, showing the deferred supplier settlement and contribution to offset finance charges, as implemented in the example code.

• Advance: The full retail cost of the financed goods is shown as a blue downward arrow. Note that the blue advance arrow is positioned at the supplier settlement date (end of month 1) rather than the contract start, reflecting the lender's perspective.

• Payments:

  • The known borrower deposit is represented by the longer blue upward arrow at the start of the time-line.
  • The known borrower payments are represented by blue upward arrows.
  • The supplier discount required to offset the financing costs is shown by a green upward arrow above the borrower’s first payment at the end of month 1.