Four Things to Do Before Applying for a Business Loan
Applying for a business loan is very different from applying for a home loan. Lenders assess every deal on its merits, ask for more information and vary much more in what they’ll accept. A little preparation can make the difference between a fast approval and a decline that stays on your credit file.
1. Use a broker who specialises in business finance
Commercial lending has its own lenders, policies and language. Ask any broker how much of their work is business and commercial finance, and how many commercial lenders they work with. Wider choice means better odds of finding a lender that fits your situation.
2. Get your documents ready
Requirements vary, but most lenders will ask for:
- Two years of financial statements and tax returns (business and personal)
- Recent BAS statements and business bank statements
- Your ATO portal statement
- A list of assets, liabilities and current loans
- Details of any security you can offer
Behind on lodgements? A low doc business loan may still be possible.
3. Check your credit and clean up loose ends
Get a copy of your personal and business credit reports and fix any errors. Pay or arrange overdue accounts, keep tax lodgements up to date, and avoid applying with several lenders at once, since every application can show as an enquiry.
4. Know exactly what you need and why
Be clear on the amount, what it’s for, how long you need it and how it will be repaid. A short explanation of the purpose and the expected benefit (for example, “new equipment will increase capacity by 30%”) helps a credit assessor say yes.
How a broker helps
We review your situation before anything goes to a lender, identify which lenders on our panel of 100+ will genuinely consider it, and present your application so it’s easy to approve. Read more about our business loans and unsecured business loans.
Frequently asked questions
What documents do I need for a business loan?
Usually two years of financial statements and tax returns, recent BAS, business bank statements, an ATO portal statement, ID, and details of your assets, liabilities and existing loans. Low doc lenders may accept BAS and bank statements instead.
Does applying for a business loan affect my credit score?
Each formal application can be recorded as an enquiry on your credit file. Several applications in a short time can make lenders cautious, which is why it helps to target the right lender first.
How long does a business loan take?
Unsecured loans can be approved within days. Secured and commercial property loans usually take a few weeks, depending on valuations and how quickly documents are provided.
Talk to Peak Capital
Book a free 15-minute call with a Sydney commercial finance broker. We’ll tell you what you can borrow and which lenders fit your situation.
This article is general information only and doesn’t take into account your objectives, financial situation or needs. Speak to us or your accountant before making a decision.
