Why map the gap before you borrow
Most owners know roughly when money gets tight. Far fewer know exactly how tight, for how long, and what causes it. That matters, because the answer decides which finance makes sense. A gap that appears every quarter around BAS time and disappears a few weeks later is a very different problem from a gap that grows month after month. The first suits a revolving facility you draw and repay; the second is a warning that borrowing alone will not fix.
This calculator rolls your bank balance forward one month at a time. Enter what you expect to receive (sales, customer payments, other income) and what you expect to pay (suppliers, wages, rent, loan repayments, GST, PAYG withholding and super) in the month each amount will actually move. The table shows the closing balance for each month, and the result panel shows the lowest point and a suggested facility size with the buffer you choose.
Making your forecast realistic
- Use cash timing, not invoice dates. If customers pay in 45 days, a June invoice is August cash.
- Include tax. BAS and super due dates are fixed and easy to forget in a busy quarter. The business.gov.au cash flow statement guide is a good checklist.
- Be pessimistic about income. Assume some customers pay late and some sales slip.
What to do with the result
If the balance dips and recovers, look at a line of credit or overdraft sized to the suggested figure, or at invoice finance if slow-paying customers are the cause. If the balance never recovers, the issue is profitability or pricing, and it is worth talking to your accountant before adding debt.
Lenders appreciate a forecast like this because it shows you understand your own business. If you want to talk about covering a gap, make one enquiry; there is no credit check to ask and a real person will review it. Bring your forecast to the conversation, and if you are unsure whether the gap is temporary, say so in your enquiry.
Frequently asked questions
What is a cash flow gap?
It is the period when money going out of the business runs ahead of money coming in, so the bank balance falls below what you need to operate. Gaps are common when customers pay on terms, stock is bought ahead of a season or a large contract starts.
How much finance do I need to cover a gap?
At least the deepest point the balance falls to, plus a buffer for things that do not go to plan. This calculator shows the lowest point and adds the buffer you choose, which gives a sensible starting size for a facility.
Which finance suits a short gap?
Revolving facilities such as a business line of credit or overdraft suit recurring gaps because you draw and repay as needed. Invoice finance suits gaps caused by customers paying on long terms. A short-term loan can suit a one-off gap with a clear end date.
Should I include GST and tax payments?
Yes. BAS payments, PAYG withholding and super are some of the biggest outflows for many businesses and often create the gap in the first place. Put them in the month they are due.
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