How much can my business borrow?

Why is there no single answer?

Because lenders size loans through different lenses, depending on what they’re relying on. Ask “how much can I borrow?” and the honest answer is “it depends which kind of loan”. Here are the three lenses, and how to estimate your own number through each.

Lens 1: what can your cash flow carry?

For unsecured and cash flow lending, the lender is relying on money moving through your account. Typical amounts for trading businesses are between $5,000 and $500,000. The rough logic:

1. Average deposits. Look at the last six to twelve months. Strip out transfers between your own accounts and one-off windfalls.
2. Subtract commitments. Existing loan repayments, leases, ATO arrangements, regular large expenses.
3. Apply caution. The lender sizes a new repayment that fits within what’s left, with room to spare.

That’s why a business with steady income from many customers may be offered more than one with the same annual turnover but big monthly swings. Read more on unsecured business loans.

Lens 2: what’s your property equity?

For property-secured lending, the lender is relying on residential or commercial property. Amounts run from $20,000 to $5,000,000. The rough logic:

1. Realistic value. What would the property actually sell for? A valuation settles this.
2. Minus existing loans. Subtract every mortgage already on it.
3. Minus a safety margin. Lenders don’t lend to the full value; they keep a cushion.

Illustrative property	Value	Existing loan	Equity before margin
Home, modest mortgage	Higher	Lower	Substantial
Investment unit, large mortgage	Moderate	High	Limited
Commercial premises, no loan	Higher	Nil	Substantial

Figures are deliberately descriptive; every property and lender differs. Read more on second mortgage business loans and first mortgage business loans.

Lens 3: what’s the asset worth?

For equipment and vehicle finance, the item being bought usually secures the loan. The amount depends heavily on the asset’s price, age, condition and resale market. New, mainstream equipment is easier to lend against than old or highly specialised equipment. See equipment finance.

What reduces my borrowing power?

Some factors quietly shrink the number:

• Existing repayments, especially daily or weekly debits
• ATO debt without a payment arrangement
• Irregular deposits or frequent overdrawn days
• Recent credit enquiries from multiple applications
• A very short trading history

And some increase it:

• Property equity
• Consistent, growing deposits
• Consolidating several small debts into one

Want a specialist to estimate your range through the right lens? Send a 60-second enquiry. There’s no credit check to ask.

Can and should are different questions

Borrowing power tells you the ceiling. The purpose tells you the right number. Business.gov.au’s guide to managing cash flow recommends planning ahead and monitoring progress against your goals. Apply that here:

• Start with the purpose. What exactly does the money need to do?
• Add a buffer. Enough for a late customer payment or a cost overrun, not a wish list.
• Test the repayment against your quietest month.

Illustrative example only. A florist could borrow considerably more against her home than she needs for a new cool room and van. She borrows for the cool room, the van and two months of buffer, nothing more. The repayment sits comfortably within even her slowest month, February, rather than being sized against Valentine’s Day and Mother’s Day trade.

A quick way to get a starting point

The 1-2-3 finance finder asks what the money is for, how much and how fast, and whether you own property. It points you to the loan types worth exploring, which tells you which lens your lender will use.

Why might two lenders give different numbers?

It’s common to hear different figures from different places, and it doesn’t necessarily mean anyone is wrong. Lenders differ in:

• How far back they look. Some average three months of deposits, others six or twelve. A business that’s grown recently looks better on a short window; a seasonal business looks better on a long one.
• What they count as income. Some exclude certain deposits, such as transfers, refunds or one-off sales.
• How cautious they are with property. Different lenders keep different margins below a property’s value, and some are more comfortable with certain property types or locations.
• How they treat existing debts. One lender may count your full ATO payment plan instalment; another may look at the remaining balance.

That’s why a matched enquiry is more useful than shopping your application around. A specialist who knows how different lenders assess businesses can point you to one whose method suits your situation, without leaving a trail of credit enquiries behind you. If you’re comparing secured and unsecured routes, our secured vs unsecured business loans page sets out the trade-offs, and business loan eligibility covers the basics every lender checks.

A quick self-estimate before you call

You can get a rough feel for your range in ten minutes. Pull up six months of business statements and note average monthly deposits and total monthly loan repayments. If you own property, jot down a realistic value and what’s owed. Bring those four numbers to your first conversation. They won’t give you a final answer, but they’ll make the call faster and far more useful.

Let’s find your real number

The right amount is the one that does the job and fits comfortably in your cash flow. Finding it is a two-way conversation.

When you enquire, there’s no credit check. A real person reads your details and phones you, and we don’t distribute your information to a long list of lenders. Please be accurate on the form, especially turnover, existing debts and any property, so the number we discuss on the first call is one you can rely on. See what your business could borrow.