Quick answer
A financial year is the 12-month period a business uses for its accounts and tax. In Australia the standard financial year runs from 1 July to 30 June, so FY27 means the year ending 30 June 2027. Lenders assess business loans mainly on your last one or two completed financial years, topped up with year-to-date figures and recent BAS.
Key points
- The Australian financial year runs from 1 July to 30 June
- 'FY27' is shorthand for the year ending 30 June 2027
- A different 12-month period needs the ATO's permission, called a substituted accounting period
- Lenders usually want your last one or two completed years, plus year-to-date numbers
Most of the world thinks of a year as January to December. Australian businesses work on a different clock. The financial year, often shortened to FY, runs from 1 July to 30 June, and it’s the period your accounts, income tax return and much of your lender’s assessment are built around.
How the Australian financial year works
The 12 months ending 30 June is the default income year for tax. Your accountant closes the books at 30 June, produces that year’s trading result and a snapshot of assets and debts, and lodges the tax return for the business. Quarterly BAS periods sit inside the same cycle: July to September is the first quarter, and April to June is the last.
Years are usually labelled by the date they finish. So:
| Label | Runs from | Ends |
|---|---|---|
| FY26 (2025–26) | 1 July 2025 | 30 June 2026 |
| FY27 (2026–27) | 1 July 2026 | 30 June 2027 |
A business can ask the ATO for a different 12-month period, known as a substituted accounting period. The ATO grants these when an entity’s circumstances fall outside the ordinary run, such as a subsidiary that needs to match an overseas parent’s 31 December balance date. Most small businesses never need one.
Why lenders care which year they’re looking at
A lender reading your financials wants to know two things: how the business performed over a full cycle, and whether that picture is still current. Your completed financial years answer the first question. The second is where timing catches people out.
Picture a business applying for a loan in late October. FY26 closed four months ago, but many accountants are still working through year-end jobs and the return may not be lodged for months. If the lender only has FY25 statements in hand, it’s judging the business on a period that ended 16 months earlier. Strong recent trading won’t show up at all unless you supply it some other way.
That’s why full-doc applications often ask for:
- the last two completed years of accounts plus the matching returns
- current-year management figures for the current year (see year to date)
- recent BAS lodgements, which show turnover quarter by quarter
If your returns are running behind, it isn’t the end of the road. Our page on business loans when tax returns aren’t up to date covers how lenders handle it, and low doc business loans rely mostly on bank statements and BAS instead.
Wondering whether your current paperwork is enough? Ask us for a second opinion before you send anything to a lender.
A worked example
A Geelong landscaping company had a slow FY25 because of a wet winter, then a strong FY26 after winning two council maintenance contracts. In October 2026 it applies for $180k of equipment finance to buy a second excavator.
- FY25 net profit: $62k
- FY26 net profit (draft accounts): $148k
- FY27 year to date (July to September): $51k
With only the lodged FY25 return in hand, the business looks marginal. Once the director supplies the accountant’s draft FY26 accounts and a year-to-date profit and loss report, the lender can see the trend clearly and assess the loan on current numbers. Same business, same month, very different answer, purely because of which financial year was on the table.
Dates worth knowing in the cycle
June has a habit of crowding the calendar: stocktakes, writing off bad debts before 30 June, finalising payroll reporting and, for some owners, a tax bill to plan for. The business.gov.au checklist is a sound starting point, and our end of financial year checklist adds a lending angle. If cash gets tight around June, see end-of-financial-year cash crunch.
Related terms
- Tax return: the annual return lodged for each financial year.
- Profit and loss statement: the year’s trading result.
- Balance sheet: the 30 June snapshot of assets against debts.
- Trading history: how many financial years you’ve been operating.
Borrowing in the middle of the year
Whether your FY26 figures are final, in draft or still sitting with your accountant, there’s usually a way to show a lender how the business is going now. Jot down the amount and the purpose on our short form; most owners are done inside sixty seconds. Asking is free of any credit enquiry, so nothing new lands on your credit report. We don’t auction your enquiry around the market either. One of our team reads it, weighs up your particular year, and rings you. Honest turnover and trading-time figures matter here, since they decide which lender we steer you towards on that first call.
Frequently asked questions
When does the Australian financial year start and end?
It starts on 1 July and ends on 30 June the following year. The 2026–27 financial year began on 1 July 2026 and finishes on 30 June 2027.
What does FY26 or FY27 mean?
It's shorthand for the financial year by the calendar year it ends in. FY26 is 1 July 2025 to 30 June 2026, and FY27 is 1 July 2026 to 30 June 2027.
Can my business use a different financial year?
Only with the ATO's approval. A substituted accounting period lets an entity use another 12-month period, for example to line up with an overseas parent company that balances on 31 December. Individuals are rarely granted one.
Which financial years will a lender ask for?
Full-doc lenders typically ask for the last two completed years of financial statements and tax returns. If your latest year isn't finished by your accountant yet, many will accept year-to-date management accounts and BAS to fill the gap. Low-doc lenders lean more on bank statements and BAS.
Is it harder to get a business loan near the end of the financial year?
Not harder, but timing matters. In July to October your newest year often hasn't been prepared yet, so a lender may be looking at figures that are more than 12 months old. Having draft year-end accounts ready helps.