Quick answer
A startup business loan funds a new business before it has much trading history. Because lenders can't rely on past bank statements, they lean on property security, the owner's experience in the industry, a solid plan and the owner's own contribution. Property-backed loans from $20,000 are the most common route; unsecured amounts usually need at least a few months of trading first. Grants and government programs are worth checking alongside a loan.
Key points
- Lenders can't rely on trading history, so security and experience matter more.
- Property equity is the most common way new businesses borrow.
- Unsecured lending usually opens up after a few months of trading.
- Spending less upfront, through used equipment or staged fit-outs, lowers the risk.
- Most common route
- Property-backed loan from $20,000
- Unsecured
- Usually after several months of trading
- Lenders look at
- Security, industry experience, plan, contribution
- Purpose
- Business purposes only
Starting a business means spending before you earn. The fit-out, the first vehicle, the coffee machine, opening stock, the bond on the lease: it all lands before the first customer walks in. Startup business loans exist for that stretch, but they work differently from loans for established businesses, because the lender has no trading history to look at.
The ABS recorded about 460,000 new businesses in 2025–26, and about 375,000 that stopped trading. The new ones that last tend to start with sensible debt and a clear plan for paying it back.
How do lenders assess a business that hasn’t traded yet?
Without bank statements, lenders look for other reasons to be confident:
| What they look at | Why it matters | How to strengthen it |
|---|---|---|
| Property security | Gives the lender a fallback | Know your equity and what’s owed |
| Industry experience | Shows you know how the business works | Spell out your years and roles |
| Your contribution | Shows you share the risk | Put in cash or equipment you own |
| The plan | Shows how repayments will be met | Realistic numbers, not best case |
| Personal credit | The only credit history available | Check it and fix errors first |
This is why most startup lending is secured against property, usually the owner’s home. If there’s no property, unsecured lenders generally want to see a few months of deposits before they’ll lend, so a smaller start funded by savings can be the practical first step.
What should a startup loan pay for?
Prioritise purchases that let the business open its doors and earn. A useful order:
- Must-haves to trade. Licences, the core equipment, a basic fit-out, opening stock.
- Things that earn directly. A vehicle for a mobile service, a second machine that doubles output.
- Nice-to-haves. Premium finishes, a bigger fit-out than you need yet, extra stock “just in case”.
Every dollar of category three you borrow is a repayment the business has to carry before it’s proven itself. Our page on fit-out finance covers how to stage a fit-out, and the payback calculator shows how quickly each purchase needs to pay its way.
What other funding should you look at?
A loan is one option among several. business.gov.au has a searchable list of grants and programs, and depending on your situation there may be state small business support too. Common mixes:
- Your own savings plus a property-backed loan for the bigger items.
- A supplier who offers terms on opening stock.
- Used equipment bought outright, with finance only for the critical new item.
- Buying an existing business instead of starting from scratch; see buying a business.
Illustrative example. A pastry chef in Hobart with 12 years in hotel kitchens wants to open a bakery. The fit-out, oven, mixer and cabinets come to about $210,000. She has $50,000 saved and around $400,000 of equity in her home. A property-backed loan for $160,000 covers the rest. She buys a used deck oven to save $25,000 and leaves the second display cabinet until the shop has three months of sales behind it.
What mistakes do new owners make with startup debt?
- Borrowing for the dream fit-out instead of the one that gets you trading.
- Forgetting working capital. Wages, rent and stock in the first months need cash too.
- Stacking short-term loans once trading starts. One properly sized facility beats three expensive ones.
- Ignoring the lease. A personal guarantee on a five-year lease is debt in all but name.
What should your plan show a lender?
A lender doesn’t need a glossy business plan. It needs clear, honest numbers. Keep it to a few pages:
- What you’re starting and who your customers are.
- Your experience and that of anyone working with you.
- What it costs to open, itemised: fit-out, equipment, stock, bonds, licences.
- How it’s funded: your contribution, the loan and anything else.
- A first-year forecast showing sales building gradually, not overnight.
- Monthly running costs: rent, wages, stock, repayments.
- What happens if sales are slower: the buffer, and the costs you’d cut.
Lenders are wary of forecasts where sales start at full capacity in month one. A plan that shows a realistic ramp-up, and still covers repayments, is far more convincing.
Starting something new? Let’s fund it sensibly
New businesses deserve funding that gives them room to grow, not repayments that choke them in month three. Enquiring with us doesn’t involve a credit check; that only happens if you decide to proceed. We don’t hand your details to a queue of lenders. One person looks at your plan, your experience and any property, and calls you with options that fit.
Please be accurate on the form about what you’re starting, what it costs and what you’re putting in. It helps us get it right first time. Tell us about your new business.
Frequently asked questions
Can I get a business loan with no trading history?
Yes, but usually with property security. Without trading history, the lender has no bank statements to assess, so it relies on the property, your experience and your plan. Unsecured lenders typically want at least six months of trading first.
How much of my own money do I need to put in?
There's no single rule, but lenders like to see the owner sharing the risk. Putting in a meaningful part of the startup cost, whether cash or equipment you already own, makes approval more likely and the business more resilient.
Does industry experience really matter?
A lot. A chef with ten years in commercial kitchens opening a café is a very different risk from someone who's never worked in hospitality. Put your experience front and centre.
Should I buy new or used equipment when starting out?
Often used, for anything that isn't critical or still under warranty value. It lowers the amount you borrow and the repayments while the business finds its feet. Our guide to buying outright or financing equipment works through the trade-offs.
Are there government grants for startups?
Some, depending on your state, industry and circumstances. business.gov.au has a searchable list of grants and programs. They rarely cover everything and can take time, so most new owners combine a grant with their own money or a loan.