Quick answer
Before you call a business lender, work out the amount by adding the core cost, any deposit or upfront costs, loan costs and a modest buffer, minus any cash you'll contribute. Then describe the purpose in one sentence that says what the money buys and how it helps the business earn or save. A clear amount and purpose are the two things that most quickly point the specialist to the right option.
Key points
- Build the number from the bottom up: core cost, extras, loan costs, buffer, minus your contribution.
- Say the purpose in one sentence: what it buys and why it helps.
- A range is fine, as long as you can explain what moves it.
- Borrowing too little can be as much of a problem as borrowing too much.
Two questions every call starts with
“How much do you need?” and “What’s it for?” are the first two questions a business lending specialist will ask. They sound simple. Yet they’re the two answers that most often get revised halfway through a call, because the figure was a guess and the purpose was vague.
Ten minutes of thinking before you ring makes both answers sharper, and a sharper answer gets you to the right option faster.
Working out the amount
Build it from the bottom up rather than picking a round number:
| Line | Example (illustrative) |
|---|---|
| The core cost (equipment, stock, tax bill, fit-out) | $120,000 |
| Upfront extras (delivery, installation, deposit, stamp duty where relevant) | $8,000 |
| Loan costs you choose to include (fees, legal, valuation) | Ask the specialist |
| A modest buffer for overruns or timing | $10,000 |
| Minus the cash you’ll contribute | –$20,000 |
| Amount to ask about | About $118,000 plus loan costs |
Figures are illustrative only.
You won’t know the loan costs until you’ve spoken to someone, and that’s fine. Say, “About $118k, plus whatever the costs of the loan are.”
business.gov.au also suggests working out the maximum repayment you can afford before you apply. A simple cash flow statement helps with that.
Why too little can be a problem
It’s natural to ask for the smallest figure possible. But borrowing too little can leave you short halfway through a fit-out, a stock order or a contract, and a second loan on top of the first is usually harder and more expensive than getting the number right the first time. If there’s a real chance costs will run over, build that in and say so.
Saying the purpose in one sentence
A good purpose statement answers two things: what the money buys and how it helps the business. Some examples:
“To buy a second refrigerated van so we can take on the supermarket delivery contract we’ve been offered.”
“To clear about $70k of GST and PAYG owing to the ATO, so we’re back on a clean footing before the next BAS.”
“To pay for stock ahead of Christmas. Our sales roughly double in December and we need to order in October.”
Illustrative examples only.
Each one tells the specialist what kind of facility suits and how repayment is likely to work. A new van that earns contract income suits a different structure from a seasonal stock order that sells through in eight weeks.
Purposes that need a bit more explanation
Some purposes are perfectly fine but benefit from a sentence of context:
- Refinancing other debt. Say which debts, and why: repayments too heavy, a lender calling it in, simplifying. See talking about existing debts.
- Working capital. Say what the gap is: slow-paying customers, growth, a seasonal dip.
- Buying a business or a partner’s share. Say roughly what’s being bought and the settlement date.
- Several purposes at once. List them. One loan or two is a question for the specialist.
Business finance is for business purposes only. If part of the need is personal, say so and the specialist will tell you straight what can and can’t be covered.
What to say if you genuinely don’t know the figure
Sometimes you won’t know until you’ve spoken to a supplier or your accountant. That’s fine. Give the specialist the range and the variable:
“Somewhere between $250k and $400k. It depends on whether we buy the building next door or lease it, which we’ll decide this month.”
Illustrative example only.
The specialist can then explain how each end of the range might work, which may actually help you decide.
Put it together
Once you have the amount and the purpose, you’re ready for the rest of the first-minute script: add when you need it and whether there’s property. The free call planner turns all four into a printable card. If there’s a date driving the purchase, our page on tight deadlines will help too.
How the amount changes the options
The figure you give on the first call does more than set the size of the loan. It often decides which kind of facility is realistic. Broadly:
| Amount you’re asking about | What the specialist will often explore |
|---|---|
| Smaller amounts for a trading business | Unsecured or cash-flow options sized on turnover and bank statements, typically $5,000 to $500,000 |
| Larger amounts, or when trading history is short | Property-secured options from $20,000 to $5,000,000 |
| A short-term gap with a clear repayment source | Structures designed to be repaid when the money arrives, such as a sale or contract payment |
| An ongoing, up-and-down need | A facility you can draw and repay, rather than a lump sum |
That’s why it pays to explain what drives your figure. “We need $300k, but $120k of that is a tax bill and the rest is a fit-out that could wait a month” may lead to a different structure from one $300k loan.
It also helps to think about how the money will be repaid, not just how much. A loan repaid from steady monthly trading suits a regular repayment schedule. A loan repaid from a single event, such as selling a property or receiving a contract payment, suits a shorter term with the exit clearly planned. Say which it is, and the specialist can match the structure. If the money comes with a date attached, add that too, using our page on tight deadlines.
Ready with a number?
Ring 03 4059 1829 and start with your amount and purpose. Or put them into the 60-second enquiry and we’ll call you back. There’s no credit check to enquire, your details aren’t handed around a group of lenders, and a specialist will sanity-check the number with you. Please give your honest best estimate, because that’s what lets us match the right loan to the job.
Frequently asked questions
How do I know how much to borrow for my business?
Start with what you're paying for, add deposits, delivery, installation or other upfront costs, add loan costs, then a sensible buffer. Subtract any cash you'll put in. The specialist can help refine the figure on the call.
Is it OK to give a range when I call?
Yes. 'Somewhere between $80k and $110k, depending on whether I buy the second trailer' is a useful answer because it tells the specialist what drives the number.
What counts as a business purpose?
Spending for running or growing the business: stock, equipment, vehicles used in the business, wages, tax, fit-outs, buying a business, refinancing business debt. Business finance is for business purposes only.
Should I ask for more than I need, just in case?
A small buffer is sensible. A large, unexplained cushion makes repayments heavier and can raise questions. Explain any buffer and what it covers.
Can the loan cover several things at once?
Often, yes. Say so upfront, for example: 'Clear the BAS debt and buy a replacement van.' The specialist can advise whether one facility or two makes more sense.