How to improve your chances of business loan approval

Understand what lenders are looking at

Non-bank lenders in Australia primarily assess:

• →Revenue consistency — how much is coming in, and how regularly
• →Serviceability — can your cash flow support the repayment?
• →Time in business — how long you've been trading
• →Credit history — both business and personal
• →Loan purpose — is there a clear, credible reason for the funds?

Clean up your bank account before you apply

Your business bank statements are the most important document in a non-bank loan assessment. Most lenders review the last 3–6 months in detail.

Green flags: regular, consistent revenue deposits; positive average balance; manageable outgoings; evidence of business activity.

Red flags: frequent overdrafts; dishonoured direct debits; ATO direct debits (signals overdue tax); large unexplained withdrawals; declining revenue trend.

Sort out any ATO obligations

Overdue ATO obligations are visible in bank statements and credit file checks. If you have outstanding BAS, income tax, or PAYG obligations — engage with the ATO early, get any arrangement formalised before you apply, and demonstrate at least 3 months of consistent payments.

Check your credit file before lenders do

Pull your business and personal credit reports before applying. Look for incorrect defaults, unauthorised enquiries, and outdated information. In Australia, the main credit bureaus are Equifax, Illion, and Experian. Checking your own file does not affect your score.

Apply for an amount your revenue can support

Most non-bank lenders want your proposed repayment to represent no more than 15–20% of your average monthly revenue. If your average monthly revenue is $25,000, that means a maximum comfortable repayment of $3,750–$5,000/month.

Have a clear, specific loan purpose

Compare these:

Weak: “Working capital for business operations”

Strong: “Stock purchase ahead of Christmas trading — we typically order $85,000 in Q4 stock in October, this year cash flow timing means we need external funding”

Don't apply everywhere at once

Each loan application typically results in a credit enquiry on your file. Multiple enquiries in a short period signals financial distress. Using a comparison service like Avoir means one enquiry is used to match you with multiple lenders, protecting your credit file.

What to do if you're declined

Ask for the reason in writing. Give yourself time before reapplying. Address the specific issues, allow time for your credit file to show improvement, then try again.

General information only. Not financial advice. Subject to individual lender assessment and eligibility.