Starting or growing a new business often requires capital — but lenders are cautious about businesses with short trading histories. Banks typically want 2+ years of tax returns before they'll consider a business loan. So what are your options if you're new?
The good news: the non-bank lending sector has expanded significantly, and there are real products designed for newer businesses.
Why New Businesses Struggle with Lending
Traditional lenders assess business loans primarily on:
- Financial history (tax returns, BAS statements)
- Demonstrated repayment capacity
- Time in business as a proxy for stability
A new business has none of these by definition. Lenders see this as high risk — and most will decline or require substantial security.
Options for New Businesses
1. Personal Loan (Using Personal Income)
If the business is genuinely new, your personal income (if you still have PAYG income or are transitioning) can support a personal loan. Personal loan amounts up to $50,000–$75,000 are available without requiring business financials.
Downside: personal credit is at stake; rates are higher than secured business loans.
2. Secured Business Loan Against Property
If you own a home or investment property with equity, many lenders will approve a business loan secured against that property — regardless of how new the business is. The property is the security; your business financials are secondary.
3. Equipment Finance
If the loan is for specific equipment (a van, machinery, computers), equipment finance is often available to new businesses. The equipment itself is the security. Terms from 1–7 years.
4. Fintech Revenue-Based Lenders
Lenders like Prospa and Moula will consider businesses with as little as 6 months' trading history and $5,000–$10,000/month in revenue. Approval is faster, amounts are smaller, and rates are higher — but it's a realistic starting point.
Running a new business and need funding?
We know which lenders work with businesses under 2 years old. Get a free assessment of what's available.
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5. Business Credit Cards
Not technically a loan, but business credit cards can provide $5,000–$50,000 in revolving credit and are often approved based primarily on personal credit. Useful for small operational expenses but expensive if not paid monthly.
6. Government Grants and Support
Before borrowing, check available grants. Business.gov.au lists federal and state grants by industry. NSW-specific programs include the Small Business Connect program and various industry-specific grants. Grants are non-repayable — always check before borrowing.
7. Franchise-Specific Finance
If you're buying a franchise, some franchisors have preferred lenders who understand the brand and are willing to lend based on the franchise model rather than your trading history.
What Helps Your Application
Even with a new business, these factors improve your chances:
- Strong personal credit score
- Property equity to offer as security
- Formal business plan with projections
- Industry experience (even if in this business for a short time, relevant experience matters)
- Consistent personal income during the business start-up phase
Building Toward Traditional Lending
If you can't access the funding you need right now, the path forward is clear: 12–24 months of consistent trading history, lodged BAS statements, and a clean personal credit record opens the door to much better products at lower rates.
New business and need funding?
We know which lenders work with businesses under 2 years old. Free assessment of your options.