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How can I improve my risk rating?

21 November 2017

While financial results are important, a risk rating is not just about numbers. Banks look at a variety of information to assess how well you operate as a business and service any debt.

Behaviour is a huge factor that many business owners overlook. There’s a lot you can do to improve your position, regardless of the amount borrowed or cash flow available.

In addition to up to date financial statements and integrated three-way projections (cash flow, profit and loss and balance sheet), financiers will consider actions around four key areas where business behaviours also play a significant part:

  • Business planning and strategy
  • Tax and compliance
  • Credit history
  • Open and honest communication

Four behavioural factors that can influence your risk rating

Focus area Why it’s important Questions your bank may ask
  • Business planning and strategy
Do you have an up to date financial position and comprehensive long-term plan?
  • Do you have a clear strategy and risk analysis supported by policies for handling major risks?
  • Can you provide a three year forecast?
  • Do you have a board of trusted advisors outside your business?
  • Tax and compliance
How well do you manage your tax commitments (GST/PAYG/superannuation) as an indication of cash flow management and profitability?
  • Are all your ATO commitments up to date?
  • Have payment arrangements been entered and fulfilled?
  • Credit history
How well do you manage your loan and creditor commitments?
  • Do you pay creditors within terms?
  • Have you negotiated extended or more favourable terms from creditors?
  • Is your overdraft fluctuating and kept under the limit?


  • Open and honest communication
Do you do what you say you’re going to do?
  • Do you have long-term relationships with suppliers and other trade partners?
  • Have you honoured your commitments?

BDO has a team of experienced bankers who understand how banks operate and what bankers think. They can provide advice about how to improve your position and ensure the best possible outcomes when dealing with banks.

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