With so few hours in the day, it can be extremely stressful for business owners when it comes time to apply for a loan. To make your life easier, we’ve provided some easy-to-implement tips for putting forward the strongest business loan application with the best chance of success.
1. Clearly define your purpose
Before applying, take a step back and pinpoint exactly why you need the loan. Are you looking to boost cash flow, purchase essential equipment, or expand to a new location?
Lenders prefer applicants with a well-defined purpose, as different loans cater to different needs—whether it’s asset and equipment financing, commercial property loans, or cash flow support. To ensure you’re applying for the right type of loan, it’s best to consult an experienced financial broker who can guide you toward the right options for your needs.
2. Check your eligibility first
Time is valuable, and applying for a loan you don’t qualify for is a waste of resources. If you’ve previously been unsuccessful in obtaining a business loan, it may be because you weren’t eligible in the first place. So – before you start, check the lender’s minimum requirements.
For instance, some loans require a minimum trading period—meaning startups might not qualify if they haven’t been operating for at least six months. Others may have criteria such as a minimum monthly turnover or the ability to secure the loan against assets like property. Understanding these prerequisites upfront can save you from unnecessary rejections.
3. Show your working
It’s one thing to determine how much you need to borrow, but it’s another entirely to do the figures yourself to show you can afford the loan. While your intention for borrowing money is to make a profitable return on investment, lenders will want to know you have the capacity to repay it in full – and on time.
When applying for a business loan, spend some time considering all the additional costs beyond the loan amount, interest and fees. For example, are you getting a business loan to upgrade your facilities? If so, you should factor in the cost of installation or shipping.
4. Get your paperwork in order
Time may be at a premium, but organising all the relevant paperwork is arguably the most important step. A busy lender who is reviewing multiple potential loanees could very easily dismiss your application if you are missing key information.
Whether you are applying to an online or traditional bank, you may need to include relevant business information such as:
- Your Australian Business Number (ABN) or Company Number (CAN)
- Bank statements
- Proof of company directors’ income
- Business plan
- Personal identification (e.g. passport)
- A rundown of your current financial position
- List of clients
A well-organised application demonstrates professionalism and credibility, giving lenders confidence in your ability to manage finances effectively.
5. Do your due diligence
Running a business comes with risks, and financial mismanagement is a major reason for failure. In fact, one in three businesses closes within the first year, and three out of four shut down by their fifth year—often due to poor cash flow.
To strengthen your loan application, demonstrate that you’ve taken proactive steps to manage financial risks. Regular financial forecasting, budgeting for seasonal fluctuations, and maintaining emergency savings all show lenders that your business is financially resilient. By proving you can manage cash flow effectively, you significantly improve your chances of securing the loan you need.
6. Engage a commercial broker
While not essential, it’s a good rule of thumb to engage a commercial broker to help you get your business loan application in the best shape possible. Especially if you have had unsuccessful applications in the past, an experienced broker can help you plug any gaps and also guide you towards the right lenders for your particular needs.
“At Ezi PL, we assist business owners in positioning their applications for success,” says Gary Rawlings, Managing Director at Ezi PL. “We help explore lending options, fine-tune financial details, and provide access to tailored solutions that can ease repayment pressures. Given how crucial cash flow is to a business’s survival, having expert guidance can ultimately save both time and money.”
A well-prepared business loan application increases your likelihood of approval and ensures you secure the best loan terms for your needs.
