Financial forecasting, the lender’s perspective

This is often why the three-way forecast model is so impactful. A three-way forecast is a forward-looking tool that allows businesses to manage cash flows, capital deployment, profitability, and strategic decision making. But what makes an impactful and more meaningful forecast starts with thinking about the end user.

In this series, we look at the different perspectives of those who are most affected by forecasting and budgeting.  Learn from lenders, business owners, and investors who use forecasting and budgeting for different purposes and understand how to use these tools effectively for business decisions.

The lender’s perspective

Grant Thornton Partner, Nick Love recently interviewed Mark Nicholas, Founder and CEO of Anchor Private Financial Services about forecasting and budgeting for businesses, focussing on the lender's perspective on three-way forecasting.

According to Mark, having a personal and face-to-face relationship with the bank is critical for private businesses, as it helps communicate their story, seek out the best fit for their needs and avoid potential stress.

What banks look for in a forecast

Banks use forecasts and look at a range of financial indicators to measure the performance and risk of a business when assessing the serviceability and suitability of the proposed debt facility, as well as the compliance with responsible lending guidelines. They also set covenants and reporting requirements based on the forecast.

Grant Thornton Private Business Tax & Advisory Partner Nick Love, explore this topic in more detail, here:

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Grant Thornton has the expertise to help businesses prepare financial forecasts and budgeting to meet their needs. Businesses should seek out external advice from accountants and advisors, take a considered approach to their forward projections, and be prepared to support their assumptions.

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