Why Your Lender Needs a Three-Way Forecast – And Why Your Business Does Too
With FY2024 behind us and FY2025 well underway, finalising your financial accounts and tax returns might feel like a routine task. However, updating your three-way forecast alongside your accountant-prepared financials is more than just compliance—it’s a strategic move that can impact your borrowing power, interest rates, and overall financial stability.
Why Lenders Rely on Three-Way Forecasts
If your business has debt facilities over $1.5M, your lender is likely in the process of updating your internal risk rating, using your FY2024 financial data. This risk assessment typically happens between October and March, once statutory accounts become available.
Here’s why timing matters:
- If your lender receives accountant-prepared financials, your business will be assessed accurately.
- If only management accounts are available, your lender may downgrade your risk rating.
- A lower risk rating can reduce your borrowing capacity and increase interest rates.
Bottom line: Delayed or incomplete financial reporting can cost your business money and opportunities.
What Your Lender Needs from You
To maintain a strong financial position, you’ll need to provide your lender with:
✅ Historical financial statements (last 2–3 years)
✅ ATO portal printouts to confirm tax, GST, and super are up to date
✅ Aged creditor’s ledgers
✅ Corporate structure diagrams
✅ Background and experience of directors/guarantors
✅ Recent bank statements (at least 6 months)
✅ Details of existing loans, overdrafts, and equipment finance
✅ Information on owned and leased business properties
However, one document stands out as the most valuable financial tool—your three-way forecast.
Why a Three-Way Forecast is Essential
Lenders don’t just want to see where your business has been—they want a clear picture of where it’s headed. A three-way forecast integrates:
📌 Profit & Loss – Understanding your revenue, expenses, and profitability.
📌 Balance Sheet – Evaluating assets, liabilities, and net worth.
📌 Cash Flow – Predicting how funds will move in and out of your business.
This comprehensive view:
✔️ Demonstrates financial control and strategic planning
✔️ Increases lender confidence in your business’s stability
✔️ Strengthens your case for securing or expanding finance
Even beyond lending, a three-way forecast helps business owners make informed decisions, plan for growth, and adjust strategies based on real financial insights.
Get Expert Help with Your Three-Way Forecast
A well-prepared three-way forecast gives you a competitive edge—whether you’re seeking finance, managing cash flow, or driving business growth.
Our team specialises in creating accurate, tailored three-way forecasts to help businesses like yours stay ahead and secure their financial future.📩 Get in touch today to discuss your forecasting needs and take control of your financial future!
