How much can I borrow for my business?

Why is there no single number for “how much can I borrow”?

Because a business loan isn’t sized off one figure. A lender looks at the same request from three directions and lends up to the smallest of the three answers:

1. The security limit. If property is involved, how much of its value can sit behind the loan once any existing mortgage is taken into account.
2. The cash-flow limit. How much repayment your business can realistically carry from the money moving through its accounts.
3. The purpose limit. How much the job actually needs — the tax bill, the machine, the stock order, the purchase price.

A business with a large property but thin, erratic income can hit the cash-flow limit first. A business with strong turnover but no property hits the security limit sooner, which is why unsecured options sit in a lower band. And a business with plenty of both still won’t be lent $900,000 to cover a $120,000 BAS bill, because the purpose doesn’t justify it.

Understanding which of the three limits you’re likely to hit first is the fastest way to a realistic number.

What ranges are actually available?

These are the broad bands the options fall into for Australian businesses. Every loan is still assessed on its own facts.

Route	Typical amount	What sets the size
Unsecured / cash-flow loan	$5,000 – $500,000	Turnover, bank statement conduct, time trading
Business line of credit	Within the unsecured band	Turnover and how the account is run
Property-secured (first or second mortgage, caveat)	$20,000 – $5,000,000	Property value, existing debt, exit or repayment plan

The unsecured band is sized mainly on turnover and bank statements. Lenders want to see regular deposits, an account that isn’t constantly overdrawn, and a trading history long enough to show a pattern. For the details, see how much you can borrow without property.

The property-secured band is much wider because the property does a lot of the work. First mortgages, second mortgages behind an existing bank loan, and caveat loans can all be used for business purposes over residential or commercial property. The mechanics are covered in how much equity you can borrow against.

How do I work out my own number before I ask?

You can get close with four questions of your own:

• What exactly is the money for, and what does it cost? Get quotes, invoices or the ATO statement. A precise purpose sets a firm ceiling.
• Do you, or does a company director, own property with equity in it? If yes, the upper limit moves a long way up.
• What does a normal month of deposits look like? Average them over the last six to twelve months, ignoring one-off windfalls.
• What repayment could the business carry in a slow month, not a good one? That’s the number a careful lender will test.

If you would rather have those questions put to you one at a time, the loan navigator asks them in order and tells you which route you’re likely on.

What does this look like in practice? (Illustrative example)

Illustrative only — not a real client, and not an offer.

A Brisbane wholesale business has been trading for four years. Deposits average about $180,000 a month with a steady pattern. The owner wants $400,000 to fund a large stock order ahead of a new supply contract, and owns a home with a moderate bank mortgage.

• Purpose limit: the supplier invoices total $385,000, so the request of $400,000 is close to justified.
• Cash-flow limit: the statements are strong enough to support a meaningful unsecured amount, but $400,000 sits at the top of what turnover alone might justify, and repayments on a short unsecured term could squeeze a slow month.
• Security limit: the home has enough equity for a second mortgage behind the bank loan to cover the full amount.

The likely outcome is either a property-secured loan for the full amount on a term that suits the contract’s payment cycle, or a smaller unsecured facility combined with supplier terms. Both paths are sensible; which is better depends on how quickly the contract pays and how the owner feels about using the home. That’s the kind of conversation a real person should walk you through — and it’s exactly what happens when you send a 60-second enquiry.

What makes lenders offer less than I asked for?

A reduced offer usually traces back to one of the three limits:

• Uneven or declining deposits pull the cash-flow limit down.
• Existing debts and daily or weekly repayments to other lenders eat into what’s left to service a new loan. See what slows a business loan down for how stacked debts are viewed.
• An existing mortgage close to the property’s value leaves little equity for the security limit.
• A vague purpose (“working capital”, with nothing behind it) leaves the lender guessing.
• Credit issues don’t automatically block a loan, but they can shrink the amount or shift the route. More on that in what lenders look at.

Is borrowing the maximum ever a good idea?

Rarely as a goal in itself. The best-sized loan is the one that fully solves the problem, has repayments your slow months can carry, and leaves room to breathe. Borrowing short of the need can be as risky as borrowing too much, because you end up coming back for a second loan on worse terms.

A useful test: if the loan does exactly what you planned, can you see where the repayments or the payout come from? If you can, your number is probably right.

Find out your number without touching your credit file

You don’t have to work this out alone, and asking costs your credit file nothing — there’s no credit check when you first enquire. Your details stay with one team rather than being sprayed out to a list of lenders, and a real person looks at your security, cash flow and purpose together to tell you what’s realistic. Fill in the form as accurately as you can, especially the amount, what it’s for and any property you own, so the first answer you get is the right one.

Ask what your business could borrow →