Section 7, financing facilities, is one of the shortest sections on the Appendix 5B and one of the easiest to under prepare. It asks a simple question: what financing does the entity have access to, beyond the cash already sitting in the bank? For an explorer running close to its two quarter funding threshold, the answer does not stay inside Section 7. It flows straight into item 8.5 of the runway calculation, where unused facilities are added to cash on hand to determine total available funding. Get Section 7 wrong and Section 8 is wrong with it, even if every other number on the form reconciles perfectly.
What Section 7 Actually Asks For
The form splits financing facilities into three categories, each reported as a total facility amount and the amount drawn at quarter end.
| Item | What it is | What to report |
|---|---|---|
| 7.1 | Loan facilities | Total facility amount and amount drawn |
| 7.2 | Credit standby arrangements | Total facility amount and amount drawn |
| 7.3 | Other (please specify) | Any financing arrangement not captured above |
| 7.4 | Total financing facilities | Sum of 7.1 to 7.3 |
| 7.5 | Unused financing facilities available | 7.4 minus total drawn |
Item 7.6 asks for a note describing each facility individually: the lender, the interest rate, the maturity date, and whether it is secured or unsecured. That note is not optional colour. It is where ASX and the market form a view on whether the figure at 7.5 is real, accessible cash, or a number that looks better on paper than it will perform if called on.
What Counts as Available
Not every facility on the balance sheet belongs in the unused total at 7.5.
A facility only belongs in 7.5 if it is genuinely available to be drawn today. A conditional facility subject to milestones not yet met, an expired facility awaiting renewal, or a related party loan that needs a director's discretionary approval each time it is used, does not meet that bar. ASX has queried explorers whose item 8.7 runway figure only cleared two quarters because a facility counted at 7.5 was not, in practice, available on demand.
This is where AASB 6 and finance judgement intersect with disclosure. A facility can exist, sit undrawn, and still not belong at 7.5 if drawing on it depends on a condition the entity has not satisfied. The test is not whether an agreement exists. It is whether the cash could be drawn before the next quarter end if it were needed.
Related Party Facilities and the Section 6 Overlap
Junior explorers, particularly at the sub ten staff end of the ASX and NSX register, often fund working capital gaps with director or shareholder loans. These facilities belong in Section 7 like any other, but they create a consistency requirement with Section 6, payments to related parties. If a director loan is drawn down during the quarter, that drawdown is a financing activity in Section 3, any repayment is a related party payment candidate in Section 6, and the facility balance itself, drawn and undrawn, sits in Section 7. Three different sections, one loan. The most common Section 7 error is not a wrong number. It is a related party facility disclosed in one section and left out of another, exactly the kind of inconsistency an ASX review catches on a comparison read rather than a single section check.
Where the Errors Come From
In Xero, financing facilities rarely have one natural home. A loan facility might sit as a long term liability account, a director loan as a related party liability, and an undrawn standby arrangement might not appear in the ledger at all until it is drawn. None of that is incorrect bookkeeping, but it means Section 7 cannot be produced by pulling a single trial balance line. It has to be assembled from the facility agreements themselves and cross checked against what the ledger shows was actually drawn at quarter end.
This is how our ASX 5B Automation approaches Section 7. It reads drawn balances directly from Xero, holds a per facility register of what has been agreed against what is genuinely available, and carries the 7.5 figure straight into the Section 8 runway calculation so the two never drift apart. Every facility named in the note at 7.6 traces back to the agreement it was configured against, not to a figure re typed from memory each quarter.
Is your Section 7 facility list complete and consistent with Section 8?
Before you lodge on 31 July, we can show you what Section 7 looks like when it is built from your Xero ledger and your facility register together, reconciled straight through to your runway figure.
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Syed Samir Ahmad
Founder, Genius Accounting Solutions
CA ANZ | MBA | Salesforce Certified (4x) | Xero Partner