Quick answer
Most Australian business lenders require an active ABN, a minimum period of trading, regular turnover shown in business bank statements, an acceptable credit history for the business and its directors, up-to-date tax lodgements and a genuine business purpose. Exact thresholds vary widely between lenders and products, and security such as property or equipment can make up for weaknesses elsewhere.
Key points
- Requirements differ by lender and product; there is no single standard.
- Time trading and turnover are the most common hard limits.
- Credit history and ATO position are assessed case by case.
- Security can offset a short history or past credit problems.
Checklist
- Active ABN (and ACN for companies)
- GST registration if turnover requires it
- Months of trading shown in bank statements
- Consistent turnover
- Acceptable personal and business credit
- BAS lodgements up to date
- A clear business purpose
Eligibility is the first filter in any business loan. Before a lender considers price or amount, it checks whether the business fits its basic rules. Those rules are rarely published in detail and they vary a lot between lenders, which is why two lenders can give completely different answers to the same business. Understanding the common requirements helps you avoid applying where you have no chance and focus where you do.
The requirements almost every lender checks
| Requirement | What it means in practice |
|---|---|
| Active ABN | The business must be registered and the ABN active |
| Time trading | A minimum period, shown through statements and ABN history |
| Turnover | Regular income through business bank accounts |
| Credit history | Personal and business credit files without serious recent issues |
| Tax compliance | GST registration where required and BAS lodged |
| Purpose | A genuine business use for the funds |
| Identity and residency | Verified ID for directors, owners and guarantors |
Time trading
Time trading is the most common hard limit. It tells a lender whether the business has been through enough cycles to show a pattern. Some cash-flow lenders will look at businesses with relatively short histories if deposits are strong and consistent; many banks prefer two years of financial statements. Your ABN registration date is visible on ABN Lookup, but lenders usually care more about how long the business has actually been trading through its account. If your ABN is new, read our guide to applying with a new ABN.
Turnover and cash flow
Unsecured lenders often set a minimum turnover, usually measured from bank statements. More important than the headline figure is consistency: a steady pattern of deposits from many customers reads better than occasional large payments. Lenders also look at what is left after existing commitments, because that is what can repay a new loan. Our guide to how much a business can borrow explains how turnover becomes a borrowing figure.
Credit history
Lenders check the credit files of the business, where one exists, and of directors and guarantors. They look for defaults, court judgments, insolvency and recent repayment problems, as well as how many credit enquiries have been made recently. Past problems are not always disqualifying. Lenders weigh how recent and serious an issue was, whether it is resolved and what has happened since. See bad credit business loans and our guide to defaults and business finance.
GST, BAS and the ATO
If your turnover means you must be registered for GST, lenders will expect you to be, and they may check BAS lodgements. Outstanding lodgements are a common reason for delays. An ATO balance is not automatically a problem, particularly with a payment plan in place, but it must be disclosed. The ATO’s GST pages set out the registration rules.
Purpose
Business loans must be used for business purposes. Lenders ask what the funds are for and may restrict certain uses. Some purposes, such as buying equipment, are straightforward; others, such as paying off another lender’s loan or clearing tax debt, attract more questions. A clear, specific purpose helps eligibility and the overall assessment.
Residency and identity
Most lenders require directors and guarantors to be Australian citizens or permanent residents, though some accept certain visa holders with conditions. All will verify identity. Make sure ID is current and names match across documents.
Industry and structure
Some lenders avoid certain industries they consider higher risk or outside their expertise, and some have rules about trusts, partnerships or complex company structures. If your business operates through a trust, have the trust deed ready. If you are in a specialised industry, a lender that understands it is likely to be a better fit; our industry guides explain how lenders view different sectors.
How security changes eligibility
Security can open doors that would otherwise stay shut. A business with a short trading history or a past credit issue may not meet an unsecured lender’s rules but may be eligible for equipment finance, where the asset secures the loan, or a property-secured loan, where equity reduces the lender’s risk. That is why many owners who are declined unsecured still find options.
If you do not meet the requirements yet
Not eligible today does not mean not eligible in three months. Common fixes include lodging outstanding BAS, separating business and personal banking, clearing or arranging small defaults, reducing short-term debts, or waiting until you have the trading history a lender needs. Our guide to improving approval chances lists practical steps, and the loan readiness checklist shows where you stand.
Eligibility versus approval
Meeting a lender’s eligibility rules gets your application through the door; it does not guarantee approval. After eligibility, the lender assesses affordability, the purpose, security and the overall picture, and sets an amount and price. That is why two eligible businesses can receive very different offers. Think of eligibility as the minimum and the rest of your application as the reason a lender should say yes on good terms.
Not sure if you are eligible?
Eligibility rules are hard to see from the outside. Rather than applying to several lenders and collecting credit enquiries, make one enquiry. There is no credit check when you first enquire, a real person reviews it and your details go to one lending partner rather than a list. Answer the questions about trading time, revenue and credit history accurately, including Below Average or Poor if that applies, so the enquiry is matched to options you can actually use.
Frequently asked questions
What is the minimum time trading for a business loan?
It varies. Some unsecured lenders consider businesses with a few months of statements, while others want one or two years. Asset finance and property-secured loans can be available sooner because security reduces the reliance on history.
Is there a minimum turnover to get a business loan?
Many unsecured lenders set a minimum monthly or annual turnover. The figure differs between lenders and products, and secured lending may not require one at all.
Do I need to be registered for GST?
If your business turnover is at or above the GST registration threshold, you must be registered, and lenders will check. Smaller businesses below the threshold can still borrow.
Can I get a business loan if I'm not an Australian citizen?
Some lenders lend to permanent residents and certain visa holders, often with conditions. Requirements vary, so check eligibility before applying.
Can a business with an ATO debt be eligible?
Often yes, case by case. Lenders look at whether lodgements are current, whether a payment plan is in place and how the business is trading.
Sources and further reading
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