How to Get a Small Business Loan

Read through the step-by-step process of applying for your business loan and how to maximise your approval chances.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on September 21st, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Business Loans Banner - Small business owner smiling in his office holding a tablet

Loans help small businesses access the funds they need to cover a multitude of expenses and pay them off at their own speed. However, it’s important to understand how to give your business the best chance of loan approval. Read about getting your application submitted and approved right here in Savvy's comprehensive guide. 

How do I get a loan for my small business?

There are several key steps involved in the process of how to get business funding in Australia, so it’s important to understand what you’ll need to do to secure the finance deal you’re looking for. You should look to meet the following points along the way when considering what loan to get:

Consider the purpose of your loan

First and foremost, you should understand the purpose of your loan as a small business owner. How much do you need? What do you need the money for? How great is your need for financial assistance? It’s important to ask yourself these questions before plunging into your application, as taking on a loan is a big commitment. It can be helpful to put together a plan of exactly what needs to be covered so you can map out the costs required, as this reduces the chances of borrowing more than you need and paying a considerable amount more overall. Make sure you know whether it's a small cash advance you need or a larger loan repaid over a longer term.

Its purpose may also impact the type of loan you end up taking out. For instance, if you’re only looking for a $10,000 injection for cashflow, a basic unsecured small business loan is likely to do the trick. If you’re renovating your business premises and would prefer to take out money as you need it to pay your builders, you may prefer a line of credit with a higher limit.

Compare your small business loan options

Of course, it’s important to compare as many options as you can before taking the plunge with one particular lender. You can do this here with Savvy, as we break down offers from our lending partners so you can analyse all the areas that matter the most to you. Are you looking for offers with the lowest interest rates? Maybe you’re wanting a loan with a particular available loan term, a high maximum borrowing range or features such as free early repayments. You can consider the key points of each loan deal all in one place.

Review lender requirements

Of course, there’s little point in wasting time with a business loan if you don’t meet the eligibility requirements of the lenders you’re considering. Although the specifics will differ between different lenders, the main points male, non-binary or female operators looking for finance will be required to meet as part of your application are:

  • A minimum trading period of six months
  • A minimum monthly turnover of $5,000
  • You must be 18 years or older
  • You must be an Australian citizen or permanent resident
  • You must have a valid ABN or ACN

Think about the fees you may be charged

There are several different fees which you’ll need to consider when choosing your business loan. They’re likely to differ between lenders, with some able to waive certain charges what others don’t, so carefully analysing what these are will help you save overall. The primary fees to look for are establishment and ongoing costs, both of which can be as little as $0. Additionally, some lenders will charge a fee for paying off your loan early, which can be dependent on the size of the loan and the time left to run on it.

Gather the documents you need

Next, you’ll need to gather the documentation required for your loan application. These will include:

  • Your ABN/ACN and GST registration
  • Personal identification such as your driver’s licence or passport
  • Access to online bank statements
  • Expenses such as rent

If your loan is larger (usually above $250,000), you may also need:

  • Profit and loss statements
  • Balance sheets
  • ATO Integrated Client Account information
  • Accounts receivable and payable
  • Tax returns
  • A detailed business plan

Submit your application

From there, you have all the information and documents you need to go ahead and apply for your business loan. You’ll need to fill out your lender’s application form, which you can do online, after which you can submit it directly to your lender via their online portal.

Receive your outcome and funds

You can receive your outcome very soon after, with fast approvals in as little as an hour available from some lenders. Upon approval, you’ll be sent through a loan contract to sign, which can be done electronically, after which funding is available as soon as the same day you submitted your initial application.

Frequently asked small business loan questions

How much can I borrow?

Small business loans can allow a borrowing range of anywhere between $5,000 and $500,000, depending on the type of loan you’re after. Many lenders will cap their maximum loan amounts at $250,000 to $300,000. However, what you can actually borrow will be decided by your business’ financial situation, credit score and other individual factors. You can use Savvy's loan repayment calculator to provide a rough estimate of what you might have to pay over the course of your loan agreement. 

How long can my business loan run for?

Unsecured business loans are available for terms as short as three months and as long as three to five years. This flexibility enables you to mould your repayments to suit your business’ financial needs. For instance, if you wanted to keep your repayments at a more manageable level for your small business, you might want to lengthen your term to around three years. Alternatively, if you want to pay off your loan quickly to reduce your interest outlay, you can opt for a shorter term.

Are business loans available for any industry?

No – some lenders will place limitations on the industries with which they’re able to work. You should always check with your lender in advance if there are any restrictions which may affect your plans to access the funds you’re looking for. For instance, some lenders won’t work with debt collection agencies, foreign currency exchange services, not-for-profits or investment businesses, to name a few.

How much deposit do I need for a business loan in Australia?

You don’t need to put up a deposit for your business loan if you don’t want to. While it may help you access a lower interest rate and reduce the cost of financing overall, there’s no obligation for you to put forward a lump sum to your lender.

What if I don’t have the right documents for my loan?

If you don’t have the right documents for your application, such as tax returns, you can look to a low doc business loan. This may be the case for startup businesses which haven’t been in operation long enough to have the documents they need. Similarly, because they’re seen as posing a greater risk to your lender, borrowing ranges will be limited and rates will be higher. However, if you gather the right documents over the course of your repayment term, you can potentially refinance to a standard loan and slash your rate.

Can my country business still get approved for a loan?

Yes – you don’t have to be applying for a loan from Sydney or Melbourne to get approved for financing. Our online business lending partners can approve applications regardless of where you’re based, provided you can meet all the other required criteria. This means that in this day and age, there isn’t really such a thing as a Sydney or Melbourne business loan.

Helpful business loan guides

Business Loans Banner - Food truck business owner standing in front of his food truck

Interest-Free Business Loans

Find out more about interest-free business loans, what they are and how they work in this handy guide. If your...

Business Loans Banner - Businessman smiling while comparing the best loans on his tablet

Best Business Loans

Compare your business loan options and choose the best for you from Savvy's range of partnered lenders today. Compare business...

Business Loans Banner - Tradesman standing against his van

Small Business Loan Requirements

Familiarise yourself with the ins and outs of lender requirements for small business loans today. Whether you're looking to start...

Business Loans Banner - Barista standing next to a black board serving a customer

Finance an Existing Business

Find out more about how to finance the purchase of an existing business right here in Savvy's guide. Buying a...

Compare business loans through Savvy today 

Whether you need a small unsecured loan to boost your cash flow or a larger, secured deal to purchase equipment, you can compare a range of competitive online offers through us before you sign on the dotted line.