What do Lenders typically require to approve Small Business Loans?

What do Lenders typically require to approve Small Business Loans?

Published on 2022-08-18

Category: Small Business Owners, Small Business Finance

Share via

Every lender in Australia will have specific requirements for small business loans.Before you apply, make sure you fully understand the terms and conditions and have the supporting documents at hand. This can help you avoid last-minute surprises and expedite the release of funds that your business needs.Let’s get started.

What are the basic eligibility criteria for small business loans in Australia?

If the loan you want is worth $150,000 or less, the requirements are usually minimal. The minimum business loan eligibility criteriaare:

  • Should have a Australian Business Number (ABN) with a minimum 6 months of operations
  • Should have a turnover of $5000 per month minimum
  • Good credit history and no tax arrears

Depending on the lender, you may also need to provide:

  • Financial statements like P&L, and cash flow statements
  • Business and personal tax returns
  • Bank statements for proof of income

The above documents are essential if the loan amount is larger, or you have a low credit score. Non-bank lenders are usually more flexible with their credit policies. This means you have a better chance of getting approved, depending on the type of loan.

Are small business loan requirements different based on the type of loan?

Small business loan requirements can vary based on the type of loan you are applying for. For example, the requirements for secured small business loans may be different from unsecured ones. Secured loans are provided against security while unsecured loans do not involve security. Generally, the requirements for secured loans in Australia are less stringent than for unsecured loans. However, it can vary from lender to lender.

What are the requirements for a secured small business loan?

It goes without saying that the value of the collateral must be on par with the loan amount. Depending on the lender, the following documents may also be required when applying for a secured small business loan.

  • Proof of income generatedby the asset
  • Proof of purchase
  • Any loans taken to finance the purchase of the asset.
  • Valuation statement of the asset
  • Insurance policy

What are the requirements for an unsecured small business loan?

Non-bank lenders may fund start-ups that are less than 6 months old. However, in addition to the basic documents listed above, they may also ask for:

  • Business plan
  • Business contract of sale
  • Lease agreement
  • Cash flow statement


Tags: Small Business Loans, Requirements for small business loans, Eligibility criteria for small business loans. Small business loans in Australia, Small business loan requirements, Requirements for secured loans, Requirements for unsecured loan








Recent Posts

Need Help?

Call our experts on 1300 360 530, or