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Cash Flow Forecast

A Cash Flow Forecast is a projection of the money a business expects to receive and spend over a future period. Lenders rely on forecasts to assess repayment capacity when applying for Working Capital Loans, Business Line of Credit, and Invoice Finance. Related terms: Cashflow, Revenue, Net Income. Helpful hub: Business Owners Finance Hub.

Why Cash Flow Forecasts Matter

A Cash Flow Forecast helps predict whether a business will have enough money to operate, grow, and meet loan repayments. Lenders use forecasts to evaluate stability and repayment capacity.

  • Shows expected liquidity and future cash positions
  • Identifies periods of potential shortage
  • Strengthens business loan applications
  • Supports financial planning and budgeting
  • Essential for fast-growth or seasonal businesses

How a Cash Flow Forecast Works

  • Estimate future revenue (sales, invoices, receivables)
  • List upcoming expenses (wages, tax, rent, supplies)
  • Calculate net cashflow per week/month
  • Identify low-cash periods in advance
  • Adjust spending or borrowing strategy accordingly

Forecasts are often required when applying for Business Loans or planning expansion.

Official reference: business.gov.au

Is a Cash Flow Forecast required for business loans?
Often yes — lenders use forecasts to assess repayment strength and future liquidity.
How far ahead should a business forecast?
Typically 3–12 months, depending on business size and stability.
Is a forecast the same as a budget?
No — a budget sets spending goals, while a forecast predicts actual cash movements.
Do lenders check if forecasts are accurate?
Yes — lenders compare forecasts with past performance to assess reliability.
Can a forecast improve approval chances?
Absolutely — strong, realistic forecasts significantly improve approval outcomes.