Business Lending in Australia

Business lending is the broadest pillar in commercial finance broking. The label covers everything from a $50,000 equipment loan for a sole trader through to a multi-million-dollar funding package for a scale-stage operator buying a competitor. Different reader, different deal, same underlying broking process.

This page is for two main audiences. The first is operating businesses with everyday capital needs: working capital to bridge cash-flow timing, equipment finance to fund a vehicle or piece of plant, a term loan for a one-off project, or a refinance of existing facilities. The second is scale-stage operators thinking about platform expansion, follow-on acquisitions, or restructuring an existing capital position to release equity for the next move. Both fit under the business loans roof.

What changes between the two is the funding mix and the lender choice. Working capital and equipment finance are commodity products at the smaller end of the market; structural thinking matters but the heavy lift is finding the right lender at the right price. Scale-stage finance shifts the centre of gravity to the funding mix itself, where bank debt sits alongside operator equity and sometimes vendor or minority capital. This page covers both.

If you have a specific deal or capital need in mind, the fastest path is to start an enquiry and we will come back with a view on which lenders fit, what the structure should look like, and indicative pricing.

What we finance

Four product groups cover most business lending requirements in Australia. Most operators end up touching two or three of these across a typical year.

How lenders assess business loans

The credit fundamentals for business loans are consistent across lenders. Where they differ is in calibration and appetite for specific industries, security profiles, and operator histories.

• Trading history. Two years of financials with clean trends is the standard baseline. Twelve months or less can be workable with certain lenders, particularly for asset finance or smaller working capital lines, but the lender pool tightens. Newer businesses can still get funded.
• Cash-flow quality. Whether the business generates enough cash to comfortably cover the proposed repayments, expressed as a debt service coverage ratio (DSCR). Lenders set policy thresholds and rarely move below them. Customer concentration, margin stability, and how the business performed through recent cycles all feed into this.
• Security and asset position. What can be offered as security and what is already encumbered. Property security strengthens terms materially. Cash-flow-led lending without traditional security is available, typically at a higher cost.
• Operator profile. Experience in the industry, track record running the business, and conduct on existing facilities. For larger or more complex deals, the lender wants to see that the operator has handled situations like this before.
• Industry risk. Cyclicality, regulatory exposure, customer base diversification, and how the industry performed through the most recent downturn. Some industries (childcare, professional services, accommodation, agriculture) have dedicated lender sub-segments. Others sit firmly in the general SME lending lane.
• Existing facility structure. What facilities the business already has, how they are performing, and how a new facility would sit alongside them. This is where the consolidation conversation often starts.

Where lenders differ

Three tiers fund business lending in Australia. Matching the deal to the right tier on the first attempt is half the work of getting funded.

Deal structure

Most business loan packages combine multiple facilities to match the underlying business activity. Designing that combination is where the structural work happens.

The core building blocks. For most operating businesses, a typical lending package will include some combination of a working capital line (often an overdraft or revolving facility), an asset-secured component (equipment or property), and a term loan for any one-off project funding. Each layer can come from the same lender or from different lenders depending on what serves the client best.

Bank debt and the alternatives. Bank debt sits at the centre of most business lending. On larger or more complex deals, additional layers can sit alongside the bank position, including operator equity injections, vendor finance from a seller in an acquisition context, and occasionally minority capital from a specialist fund. Each adds cost and complexity in exchange for reducing the equity the operator needs to bring at completion.

Single-bank versus split-bank. One of the most important structural decisions for a scaling business is whether to consolidate all facilities with a single lender or split them across multiple banks. A consolidated single-bank relationship usually gets sharper pricing, faster decisions, and a simpler internal admin burden, but creates concentration risk if the relationship changes. Splitting across banks gives you optionality and the ability to play one off the other on pricing, at the cost of more complexity. We work through this trade-off explicitly with clients running multiple facilities.

Secured versus unsecured. Property security is the strongest position from a lender's perspective and the cheapest from a borrower's perspective. Unsecured lending is available, typically at materially higher rates. Most operating businesses end up with a blend, using property security where it makes sense and unsecured facilities for shorter-term working capital where speed and flexibility matter more than rate.

The right combination depends on the business, the operator, the existing facility structure, and what the next two or three years are likely to look like.

A representative worked example

The example below is a composite based on typical FGO mid-market deal patterns. Numbers and identifying details are anonymised.

The deal

A specialist contracting business in Victoria, $4.2M revenue, established eight years, owner-operator with a small management team. The business was running on an existing $400K overdraft and a couple of equipment finance facilities at different lenders, and the operator was preparing for two parallel moves: a $1.5M bolt-on acquisition of a smaller competitor, and a $750K equipment expansion to support the post-acquisition combined entity.

The funding mix

Why the lender approved the deal

The combined business had a credible post-acquisition operating plan with the seller staying involved through transition. The consolidation of the working capital and one of the legacy facilities under the new lender made the overall position cleaner from a credit perspective. Debt service coverage on the proposed package was comfortably above policy threshold even when stress-tested for short-term integration disruption. The operator had eight years of clean trading history at the existing business and had previously managed a smaller acquisition.

Outcome

The deal settled around 13 weeks from initial brief to drawdown. Combined entity revenue tracked ahead of the integration plan in year one, and the operator has since refinanced into a longer-tenor facility with an extended interest-only component.

This is broadly the pattern we see most often on mid-market scale-stage deals. The exact mix shifts with the business and the deal, but the underlying logic of consolidating facilities, layering bank debt with operator equity and vendor support, and matching the right lender to the combined position is consistent.

Our process

We run business lending with the same structural discipline as the rest of the brokerage. Four steps from initial conversation to drawdown.

Frequently Asked Questions

How much can I borrow for business lending?

There is no single number. Loan sizes vary from $20,000 equipment finance for a sole trader through to multi-million-dollar packages for mid-market operators. What you can borrow depends on the business's cash flow, available security, trading history, the proposed facility structure, and which lender tier suits the deal. We work through the specific borrowing capacity in the initial review.

Secured or unsecured business lending: which is right for me?

Secured lending (typically property-backed) gives you the lowest rate and the highest loan amount but ties the asset to the facility. Unsecured lending is faster to put in place and avoids encumbering an asset, but is materially more expensive. Most operating businesses end up with a blend: secured facilities for longer-term needs, unsecured for shorter-term working capital. The right balance depends on your asset position and your priorities on speed versus cost.

How long does business lending take to settle?

From initial brief to drawdown, expect four to twelve weeks depending on the lender, the facility type, and the complexity of the deal. Equipment finance and simple working capital facilities can move faster. Multi-facility packages and acquisition-linked deals run longer because of the integration work involved.

What is the difference between an overdraft and a line of credit?

Both are revolving facilities you can draw on as needed. An overdraft is linked directly to the business's main trading account and is typically smaller and less structured. A line of credit is a standalone facility with its own limit, often larger, and usually has more formal documentation and security requirements. For most established businesses, the practical difference comes down to facility size and how often the limit needs to be reviewed.

Can I get equipment finance separately, or does it have to be part of a larger package?

Both. Equipment finance is available as a standalone product from specialist equipment lenders, often with fast approvals and minimal documentation for smaller asset values. For larger or multi-asset programs, bundling equipment finance into a broader package with the same lender can sharpen the overall pricing and simplify the admin burden. We work through both paths in the initial review.

Can I refinance my existing business loans?

Yes. Refinancing business debt is one of the most common reasons clients come to us, particularly when an existing fixed term is rolling off, the business has outgrown the original facility structure, or facilities are spread across multiple lenders that could be consolidated. We assess the existing position, the current market, and what could be improved before recommending a new structure.

How does FGO finance a follow-on acquisition or business expansion?

Follow-on acquisitions and platform expansions usually combine bank debt with operator equity and sometimes vendor finance from the seller in an acquisition context. The structural work centres on how the new facility sits alongside the existing facilities, whether to consolidate or leave the existing position intact, and how the post-deal cash flow services the combined debt position. We approach these as structural problems first and product problems second.

My business has lumpy or seasonal income. Can I still get a business loan?

Yes, but the structure has to match the cash-flow pattern. Lenders look at full-year DSCR on stress-tested numbers rather than peak-month performance, and they pay attention to the buffer the business holds through the trough. Working capital facilities (overdrafts, lines of credit) typically suit lumpy income better than a fixed-amortisation term loan, because the repayment profile can flex with the cash position. Specialist lenders also exist for seasonal industries like agriculture and tourism with sub-segment-specific products.