Order book cover

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

Order book cover is the share of a period's forecast revenue already secured by firm orders or signed contracts, often expressed against the next year's budget. A manufacturer forecasting US$40m with US$28m of confirmed orders has 70% cover, and the lender's attention moves to the US$12m still to be won and to how much cover the business has usually had at the same point in past years. The quality of the orders matters as much as the total: whether they can be cancelled, carry deposits, are priced to cover current costs or depend on one customer.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.