Switchboard Finance | Business & Equipment Loans Australia

Annual Turnover

Annual Turnover is the total revenue a business earns over a 12-month period before expenses. Lenders use annual turnover as a key indicator of size, financial strength, and eligibility when assessing Business Loans, Working Capital Loans, Business Line of Credit, and Invoice Finance. Related terms: Revenue, Net Income, Gross Profit, Cash Flow Forecast. Helpful hub: Business Owners Finance Hub.

Why Annual Turnover Matters

Turnover is one of the most important indicators lenders use to assess the financial health and borrowing power of a business. Higher turnover generally indicates stronger capacity to repay loans and manage cashflow obligations.

Determines borrowing capacity
Indicates business size and stability
Used to validate eligibility for key finance products
Influences risk assessments and credit limits
Helps project future cashflow performance

How Lenders Use Annual Turnover

To calculate serviceability for business and asset finance
To assess risk for revolving facilities like lines of credit
To set invoice finance limits based on revenue volume
To check historical trading performance over multiple years
To verify BAS and financial statements

Turnover also plays a key role in borrowing capacity and servicing calculations.

Official reference: business.gov.au

Is annual turnover the same as profit?

No — turnover is total income before expenses, while profit is what remains after expenses.

Do lenders require proof of turnover?

Yes — lenders verify turnover using BAS, bank statements, financials, or accounting reports.

Does higher turnover improve borrowing power?

Generally yes — higher turnover can support larger loan limits and better terms.

Can turnover fluctuate during the year?

Yes — seasonal or project-based businesses often see peaks and dips in turnover.

Is turnover used for GST calculations?

Yes — turnover determines GST registration thresholds and reporting requirements.