01
The low points
Not the average balance but the lowest, and how often it is reached. A business that touches zero twice a month is a different proposition from one that never goes below $40,000, whatever their averages are.
Guide
What a lender is really reading in your bank statements.
Working capital lending is assessed on trading rather than on assets. That makes the bank statements the file, and it makes several things visible that a business does not realise it is showing.
MS
Matt Stiles Editor
Published 8 September 2026 Last reviewed 8 September 2026 Read time 12 min
The short version
Five lines that explain most decisions.
- Bank statements are the file. Income consistency, the low points, and what is already leaving each week are all visible there in a way no summary shows.
- The low point matters more than the average. A lender is asking whether the repayment can be met in the worst week, not the typical one.
- Existing commitments carry real weight. A file is assessed against total obligations, which is why an application can succeed alone and fail alongside two others.
- Receivables facilities are assessed on the ledger. Customer quality, ageing, dilution and concentration do most of the work, and the business itself does less of it.
- Indicative only. This describes how assessment generally works. Criteria vary by lender and no site can say what any particular one will decide.
The shape of it
Two questions, in a fixed order.
Every lender asks whether the facility can be serviced from the business as it actually trades, and then what happens if it cannot. On an unsecured working capital facility there is very little answering the second question, so almost the whole decision rests on the first, and the pricing reflects the thin fallback.
On a receivables facility the ledger answers both at once. It shows how the business trades and it is what the lender would look to, which is why those facilities are cheaper and why customer quality carries so much of the file.
That difference explains a good deal of what looks inconsistent from the outside. The same business can be declined for an unsecured facility and approved for a receivables one at a larger amount, because the two are answering different questions with different material.
First
Can it be serviced
Second
What happens if not
Unsecured
Almost all first
Receivables
The ledger answers both
The bank statements
Six things a lender reads that are not the balance.
A general description of what is assessed rather than any lender’s criteria, which are their own and vary considerably.
02
Income consistency
Whether revenue arrives steadily or in lumps, and how large the lumps are relative to the outgoings between them. Lumpy income is not disqualifying and it changes what an affordable repayment looks like.
03
Dishonoured payments
Returned direct debits and dishonour fees are read as a signal about how tightly the account is being run, and they carry more weight than their dollar value suggests.
04
Other lenders
Repayments to other facilities are visible in the statements whether or not they were disclosed, and an undisclosed one found this way affects the file more than the facility itself would have.
05
Tax payments
Regular payments to Inland Revenue read as a business current with its obligations. Their absence over a long period raises a question that is better answered in the application than in a follow-up call.
06
Owner drawings
Substantial and irregular drawings against a facility application invite a question about whether the shortfall is operational, and consistency here is read as discipline.
The one that matters most
Disclosing an existing facility beats having it found.
Every facility a business is servicing shows in the bank statements as a regular outgoing, so nothing is hidden by omitting it. What omission does is convert a neutral fact into a question about the application’s reliability, and it affects the file considerably more than the facility itself would have. The same is true of a past default or an arrangement with Inland Revenue. Raised in the application with an explanation, they are ordinary. Found afterwards, they are something else.
Two kinds of file
What changes when there is a ledger.
Unsecured
The business carries everything.
With no ledger and no asset, the lender has the trading position and nothing else. Trading history, income consistency, existing commitments and credit history are the whole of the file, and each carries more weight than it would elsewhere.
The practical consequence is that a short trading history is a real constraint here in a way it is not on a receivables facility. Lenders differ on their minimums, and a business declined by one on that basis is not declined by the market.
It is also where a personal guarantee is most often required, because it is the only additional recourse available.
Receivables-based
The ledger carries a great deal of it.
Here the funder assesses who owes the money and how reliably they pay. A business two years old with three large, creditworthy customers can present a stronger file than a ten-year-old business with a fragmented, ageing ledger.
Four things about the ledger do most of the work: the ageing profile, the concentration in the largest customers, the dilution from credit notes and short payments, and the quality of the customers themselves.
That is why a receivables facility is frequently available at a larger amount and a lower cost to a business that would struggle unsecured. The lender is assessing a different asset.
Preparation
What is worth having ready.
Assembling this before applying turns a week of back and forth into a single submission, and a complete file is the largest single influence on how quickly an application moves.
01
The trading picture
Recent bank statements covering enough months to show the shape of the year, financial statements where the business has them, and management accounts if they are current.
Documents commonly required
- Bank statements
- Financial statements
- Management accounts
02
The obligations
Every existing facility with its balance, repayment and security position, including anything a related entity is servicing. Completeness here is worth more than presentation.
Documents commonly required
- Existing facility schedule
- Details of any security registered
03
The ledger, where relevant
A current aged receivables report, and historic ones if available. For a receivables facility this is the most important document in the file by a distance.
Documents commonly required
- Aged receivables report, current and historic
- Customer list
04
The two answers
What the money is for, specifically, and where the repayment comes from. Both are asked in nearly every application, and a specific answer reads very differently from a general one.
No timings appear here. They vary by lender, by facility, by amount and by how complete the file is, and a page naming a number would be describing a promise nobody made.
Common declines
Four patterns that cause difficulty.
General patterns rather than rules. A lender’s actual criteria are its own and vary considerably between them.
The repayment does not fit the low weeks
The business is genuine and the average comfortably covers the repayment, and the account regularly falls to a level where it would not.
What happens:A smaller amount, a longer term, or a decline that reads as arbitrary and is not.
Undisclosed commitments
Repayments to other lenders appear in the statements that were not mentioned in the application.
What happens:The file is reassessed on reliability rather than on affordability, which is a worse position than the extra facility alone would have created.
A concentrated or ageing ledger
On a receivables facility, one dominant customer or a large share of debt beyond ninety days reduces the fundable base sharply.
What happens:A facility materially smaller than the headline, which is better discovered before the business plans around it.
No clear purpose
An application that cannot say what the money is for or where the repayment comes from is relying on the lender to construct the case.
What happens:A weaker file than the same business would have presented with ten minutes of preparation.
Three of the four are fixable before applying. Checking the repayment against the lowest recent week, listing every commitment, and preparing the two answers takes an afternoon and addresses most of what causes an avoidable decline.
The thing nobody mentions
Applying to several lenders at once has a cost.
It is tempting to submit to five lenders and take the best answer. Credit enquiries are visible, and a cluster of them in a short period reads as a business shopping urgently, which is a signal in itself regardless of the underlying position.
The better approach is to establish which lenders plausibly fit the business before applying anywhere. A business with a receivables ledger, a business with card takings and a business with neither are looking at different lenders, and narrowing that first costs nothing.
Where a broker is involved, asking how many lenders a file will be presented to, and in what order, is a fair question. The answer says something about whether the file is being placed or scattered.
Method
How this guide was written, and its limits.
This describes how working capital assessment generally works. It does not reproduce any lender’s criteria, thresholds or scorecards, because those are commercially confidential, they differ substantially between lenders, and a page stating them would be describing a policy nobody published. No approval times, approval rates or eligibility thresholds appear here for the same reason.
Nothing here is financial advice and nothing here indicates that any particular application would be approved. This site is not a lender, a broker or a registered financial adviser, and the only party who can say what a lender will decide is that lender.
Preparing well
Four things that improve a file before anything is submitted.
None of these changes the business. All of them change how it presents, and each takes less than an afternoon.
01
A current aged receivables report
On a receivables facility this is the file. A report generated the day before the application, reconciling to the ledger, saves a round of questions and reads as a business that knows its own position.
02
A written commitment schedule
Every facility, its balance, its repayment and its security, on one page. It takes twenty minutes, it prevents the worst failure mode on this page, and it demonstrates that nothing is being left to be found.
03
An explanation for anything unusual
A month with no revenue, a large drawing, a dishonoured payment, a past default. Each of those raises a question, and an answer supplied in the application is worth far more than the same answer given after a follow-up call.
04
A specific purpose and repayment source
Two sentences. What the money is for and where the repayment comes from, answered from the business as it trades rather than as it is hoped to. It is asked in nearly every file and prepared for in very few.
After a decline
What is worth doing, and in what order.
A decline is information rather than a verdict, and the first useful step is asking the lender what drove it. Many will say, at least in general terms, and the answer distinguishes between a problem with the business, a problem with the file and a problem with fit. Those three call for entirely different responses.
Where it is fit, another lender with different criteria may reach a different answer, and applying again quickly is reasonable. Where it is the file, fixing what was missing and resubmitting to the same lender is ordinarily better received than shopping the same incomplete application elsewhere.
Where it is the business, applying repeatedly makes the position worse rather than better, because each enquiry is visible and a cluster of them reads as urgency. The productive step there is the operational one: shortening the cycle, tightening collections, or reducing the amount being asked for so that the serviceability question changes.
A note on brokers
What to ask before a file is placed.
A broker with a real panel and a considered view on which lender fits is genuinely useful, particularly to a business that does not know which category it falls into. A broker who submits the same file to everyone is spending the business’s credit enquiries rather than its own effort.
The questions that distinguish between them are simple. How many lenders will see this file, in what order, and why those. How is the broker paid, and by whom. Whether the fee changes depending on which lender funds it. All three are fair, all three have straightforward answers, and the willingness to give them is itself informative.
This site is not a broker and does not place applications. It carries one disclosed referral to Prospa on the calculator, and the partner page sets out what that relationship is and where it fits.
The relationship afterwards
What happens between applications matters too.
A facility performing well is the strongest application a business will ever make for the next one. Payments on time, reporting submitted when it is due, and a funder that has never had to chase anything all count, and they count with other lenders too because the conduct is visible.
Telling a funder about a problem before it arrives is worth considerably more than it appears to. A month that will be tight, a large customer that has gone quiet, a delayed shipment: raised early, each of those is a conversation, and discovered later each is a credit event. Funders deal with the first constantly and remember the second.
The same applies to good news. A funder told about a large contract win, a lower dilution figure or a shortening cycle has reasons to revisit pricing at review, and one that hears nothing between annual reviews has no reason to change anything.
The serviceability question
The repayment a lender is assessing.
Serviceability starts with the weekly figure and the question of whether the lowest recent week could carry it. This produces the figure. Indicative only, and not a quote or offer of credit.
Indicative repayment
Weekly
$2,072/week
$8,979 /month $7,745 total interest
$100,000
$5,000 $500,000
1 year
6 months 5 years
14.00% p.a.
8% (secured) 30% (unsecured)
Indicative only. Not a quote or offer of credit. Actual rates, fees, and repayments depend on the business profile and the lender's decision.
Sending to Prospa
Your $100,000 scenario
1 year at 14.00% . Prospa will ask a few quick questions, then provide a firm quote and funding if eligible.
Redirecting…
References
Sources
- Financial Service Providers Register
Where a New Zealand lender’s registration can be confirmed before an application is made.
- Companies Office
The register used to confirm entity and director details during assessment.
- Personal Property Securities Register
Where existing security positions over a business can be seen, including ones an application did not mention.
- Commerce Commission
The regulator whose guidance covers lender conduct and disclosure obligations.
- Financial Markets Authority, financial advice
Backs the distinction between general information of this kind and regulated financial advice.
FAQ
Questions, answered
What do working capital lenders look at first?
Bank statements. With no asset behind the facility, the trading position is the file, and income patterns, the low points and existing outgoings are all visible there in a way no summary shows.
Why does the lowest balance matter more than the average?
Because a lender is asking whether the repayment can be met in the worst week rather than the typical one. A business that regularly touches zero is a different proposition from one that never falls below a comfortable level, whatever the averages say.
Should existing facilities be disclosed?
Always. They are visible in the bank statements as regular outgoings, so omitting them hides nothing and converts a neutral fact into a question about the application’s reliability, which affects the file more than the facility would have.
How is a receivables facility assessed differently?
The ledger does much of the work. Customer quality, the ageing profile, concentration and dilution carry the decision, which is why a younger business with strong customers can present a better file than an older one with an ageing ledger.
Does a short trading history rule out a facility?
It is a real constraint on an unsecured facility and much less of one on a receivables facility, where the customers matter more than the applicant’s age. Lenders also differ considerably on their minimums.
What documents should be prepared?
Bank statements, financial statements where held, management accounts if current, a complete schedule of existing facilities, and for a receivables facility a current aged debtors report. Plus clear answers on purpose and repayment source.
Is a personal guarantee usually required?
On unsecured facilities, frequently, because it is the only additional recourse available. Where one is sought, what it covers is what the document says rather than what was understood at signing.
Does a past default rule out an application?
Not necessarily. Lenders distinguish between an explained historical issue and an unexplained current one more than applicants expect, and raising it in the application with an explanation is better received than leaving it to be found.
Do payments to Inland Revenue matter?
They are read as a signal that the business is current with its obligations. A long absence of them raises a question that is better answered in the application than in a follow-up call.
Is it worth applying to several lenders at once?
It has a cost. Credit enquiries are visible and a cluster of them reads as urgency regardless of the underlying position. Establishing which lenders plausibly fit before applying anywhere is the better approach.
How long does an application take?
It varies by lender, by facility, by amount and by how complete the file is, and this site does not publish timings. A lender will state its own, and that is the figure worth relying on.
Is this guide financial advice?
No. It describes how assessment generally works. This site is not a lender, a broker or a registered financial adviser, it does not know any lender’s criteria, and it cannot indicate whether a particular application would be approved.
Related
Keep reading
The working capital cycle
The measurement that sizes the request properly.
Read onWorking capital loan
The facility this assessment is usually for.
Read onDebtor finance
Where the ledger carries the decision instead.
Read onOur finance partner
Where the referral goes, and what it does and does not suit.
Read onAll eight products
Every facility compared in the same shape.
Read on