Contracts, orders and invoices as loan evidence

Why can contracts do what tax returns can’t?

A tax return looks backwards. It tells a lender what happened in a year that’s already finished. For a business that’s new, growing fast or changing direction, that picture can be badly out of date.

Contracts and invoices look at now and next. A signed contract shows income the business has secured. A run of invoices to the same customers, paid on time, shows income that recurs. For a lender trying to work out where repayments will come from, that’s directly relevant evidence.

Which documents count, and how much?

Document	What it proves	How lenders weigh it
Signed contract with payment schedule	Committed future income	Strong, if the customer is established and the terms are clear
Purchase orders from repeat customers	Ongoing demand	Useful, stronger with a history of similar orders
Recent invoices (last 3 to 6 months)	Who you bill and how often	Useful when matched to deposits in statements
Aged receivables report	What’s owed to you and how late	Shows cash coming and how reliable customers are
Tender acceptance or letter of award	Work won but not yet contracted	Helpful context; weaker until signed
Standing agreements or retainers	Recurring monthly income	Strong for service businesses

The common thread is verification. Lenders like evidence they can check. An invoice matched to a deposit in your bank statements has been verified by your bank. A contract with a well-known customer can be checked. A handshake deal can’t.

What will a lender look for in a contract?

• Who the customer is. An established business or government body carries more weight than a new or unknown one.
• Payment terms. When and how you get paid: milestones, progress claims, monthly invoicing, days to pay.
• Your costs to deliver. A contract that needs heavy upfront spending on materials or labour affects your cash position before it improves it.
• Your track record. Have you delivered similar work before? Statements showing past payments from similar jobs help.
• Concentration. If one customer is most of your income, the lender considers what happens if they leave.

How do invoices help a thin file?

For a newer business without a tax return, invoices bridge the gap between “I’ve got customers” and “here’s the proof”. A short pack works well:

1. The last three to six months of invoices to regular customers.
2. Bank statements for the same months, with the matching payments easy to spot.
3. An aged receivables report showing what’s outstanding.

If you’re in building and construction or certain other industries, your payers may lodge a taxable payments annual report with the ATO listing what they paid contractors. The ATO says a TPAR must be lodged by 28 August each year. You don’t see your payers’ reports, but it’s another reason to make sure your own invoices and records line up.

Illustrative example: a newer firm with work in hand

Illustrative only; not a real business.

An electrical contractor set up a company eight months ago after years as an employee. There’s no company tax return yet. He’s just signed a twelve-month maintenance contract with a regional aged care group, invoiced monthly, and has been doing regular work for two builders.

He wants $50,000 for a second van, test equipment and to cover wages until the new contract’s first payments arrive. His evidence: the signed maintenance contract, eight months of company bank statements showing payments from the two builders, and his invoices. A lender can see both past income and committed future income.

When isn’t work in hand enough?

• No track record. A huge contract won by a brand-new business with no history of similar work will get careful scrutiny.
• Heavy upfront costs. If delivering the contract needs more cash than the loan provides, the lender will want to see the whole funding plan.
• Unsigned or conditional. Letters of intent and verbal agreements are context, not evidence.

For businesses gearing up for a large job, our guide on winning a big contract before your paperwork catches up goes through planning the cash. A low doc line of credit can suit contract work with uneven payment timing.

How do you present work in hand?

A one-page schedule makes contracts easy to assess. List each current contract or regular customer with:

Customer	Type of work	Value or monthly amount	Payment terms	Start and end	Paid on time so far?
Regional aged care group	Maintenance	$6,500 a month	30 days	Jan to Dec	Yes
Builder A	Fit-out subcontract	$48,000	Progress claims, 30 days	Mar to Jun	Yes

Illustrative example. Attach the contracts behind it, and point to the matching deposits in your statements. It turns a folder of paperwork into a picture a lender can read in a minute.

If a contract is still being negotiated, say so and share what you can: the scope, the expected value and when you expect it to be signed. Lenders won’t rely on it yet, but it helps them understand why you’re asking now and what the business will look like in six months.

Show us the work you’ve won

If your contracts tell a better story than your last tax return, lead with them. Start a short enquiry and mention the work in hand. There’s no credit check when you first enquire, and your details go to one team who reads them properly rather than passing them along a chain.

Please be accurate about contract values and payment terms on the form. It helps us match you with a lender comfortable with your kind of work. See what’s possible.