Seven Tips for Securing a Business Loan
Getting a business loan in Australia isn’t necessarily hard, but knowing how lenders think makes it much easier. These seven tips will improve your chances of approval and help you get better terms.
1. Know your numbers
Understand your revenue, profit, cash flow and existing debts before talking to a lender. If you can explain your numbers clearly, the lender will have more confidence in the business.
2. Be clear about the purpose
Lenders want to know exactly what the money is for and how it will be repaid. A specific purpose, such as new equipment, a fit-out, an acquisition or refinancing, is much easier to approve than general funding.
3. Choose the right type of finance
Match the product to the need: a term loan for one-off investments, a line of credit or invoice finance for cash flow, and equipment finance for assets. See which business loan is right for you.
4. Get your paperwork in order
Up-to-date financials, tax returns, BAS and an ATO portal statement speed everything up. Behind on lodgements? Ask about low doc options.
5. Look after your credit file
Check your personal and business credit reports, keep repayments on time, and avoid applying with several lenders at once.
6. Consider security
Offering property or business assets as security usually means a larger loan and a lower rate. If you don’t want to use property, unsecured business loans are available up to $1m.
7. Use a specialist broker
A commercial finance broker knows which lenders suit your industry, structure and situation, and presents your application in the way that lender wants to see it.
How we help
Peak Capital has access to 100+ banks, non-banks and private lenders. We assess your situation, recommend the right structure and manage the process from application to settlement. Read more about our business loans and working capital finance.
Frequently asked questions
How much can my business borrow?
It depends on your cash flow, existing debts, trading history and the security you can offer. Unsecured loans are usually based on turnover, while secured loans depend on the value of the property or assets.
Can a new business get a loan?
It’s harder, but possible. Many lenders want at least 12 months of trading, but some will lend to newer businesses with strong security, industry experience or a solid business plan.
What is the most common reason business loans are declined?
Insufficient serviceability, meaning the numbers don’t show the business can comfortably repay. Incomplete paperwork, overdue tax and choosing the wrong lender are also common causes.
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.
