Business Loan Requirements & Eligibility

There is no single set of business loan requirements in Australia. Criteria are set by each lender, not by law, and they vary more than most people expect. What does not vary much is the order lenders assess things in, and knowing that tells you where an application is likely to fall over before you submit it.

1. How long you have been trading

For most lenders this is the first filter, and it is close to non-negotiable. Some want a couple of years, some considerably less, and a small number will look at newer businesses with the right supporting story.

If you are newer than a lender's minimum, no amount of turnover fixes it for that lender. The answer is a different lender, not a better application.

What helps a newer business: a signed contract or clear work pipeline, documented experience in the same industry, a deposit, or an asset to secure against.

2. ABN and GST registration

An active ABN is effectively assumed. GST registration matters because it tells the lender something about scale: it is required once turnover reaches the registration threshold, so being registered signals a certain size of business, and not being registered signals the opposite. Neither is disqualifying on its own.

Our guide to ABN and sole trader lending covers how this works if you trade on your own.

3. Turnover, and how consistent it is

For unsecured lending, this is where the decision is really made, because the assessment is built on your bank statements rather than a full set of financials.

Lenders are reading for pattern, not peak. Steady deposits across the months read better than one exceptional month surrounded by quiet ones. Seasonal businesses are not shut out, but the seasonality needs to be visible and explicable, and some lenders handle it far better than others.

What hurts: dishonoured payments, extended overdrawn periods, and business income mixed through a personal account so the trading cannot be read at all.

4. Existing commitments

Every other facility counts: equipment finance, vehicle loans, other business loans, credit card limits whether drawn or not, and buy now pay later arrangements, which show in your statements whether you mention them or not.

This is the most common reason a business that looks strong on turnover is declined. Serviceability is what is left after everything else, not what comes in.

5. Credit history

For a sole trader, your personal credit file is the file. For a company, both the company's and the directors' files are relevant.

Worth knowing: every application is recorded, approved or not. Applying to several lenders to see who says yes damages the thing being assessed, at exactly the moment you need it intact. That is the single most avoidable mistake in business finance.

6. Guarantees

Directors' guarantees are standard on commercial lending. A guarantee is not security over a specific asset, but it does mean you personally stand behind the loan. If you trade through a company or trust, expect to be asked, and read what you are signing. Our guide to how your business structure affects finance covers who signs in each structure.

7. Lodgements and tax position

Lenders ask about ATO debt, and being up to date on lodgements matters more than people assume, often more than the debt itself. A business that has lodged everything and cannot yet pay presents very differently from one that has stopped lodging.

If a tax debt is part of the picture, the deductibility of ATO interest changed in 2025 and it affects the maths: see ATO payment plan or business loan.

What to fix before you apply

• Separate business and personal banking, if they are not already. It is the cheapest single improvement.
• Clear or reduce small facilities, particularly unused credit card limits and buy now pay later.
• Get lodgements current, even if payment is not.
• Do not shop applications. Get matched once.
• Know what you are funding. If it is an asset, secured equipment finance or a low doc business loan is usually better than an unsecured one.

What you will be asked to provide

For unsecured lending, typically recent bank statements, your ABN and GST details, identification, and a short explanation of the purpose. Full financials are not usually required, which is the point of the product. For asset finance, add the details of what you are buying.

Where a broker fits

Since the criteria are lender policy rather than law, the useful work is knowing which lender's policy fits your situation before anything is submitted. That is the difference between one approval and three declines on your file. Our business loans page sets out what we arrange, Australia-wide.

This article is general information only and is not financial, tax or legal advice. Lender criteria vary between lenders and change.

Damo Treadgold is the director of Treadgold Finance, an FBAA-accredited finance broker on the Sunshine Coast, arranging business, equipment, vehicle and personal finance Australia-wide.

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