New business? What to say when you call about finance

Why trading history comes up so early

“How long have you been trading?” is usually one of the first questions a business lending specialist asks. For newer businesses, it can feel like a trap. It isn’t. It’s a sorting question. Lenders use trading history as a rough measure of how predictable the business’s income is, and many unsecured lenders set a minimum. Knowing your trading time lets the specialist skip lenders you wouldn’t suit and focus on ones you might.

What to lead with

When you’re calling about a newer business, give the specialist:

1. Exactly how long you’ve traded. “Seven months”, not “under a year”. Mention the ABN registration date if you know it.
2. What’s come in since you started. Monthly deposits, even for a few months, and the trend.
3. What the money is for and roughly how much.
4. Whether you own property, including a home.
5. Your background. Years in the industry, a previous business, trade qualifications.

Scripts you can adapt

A newer trade business:

“I set up as a sole trader electrician eight months ago, after twelve years working for a larger contractor. Deposits have grown from about $15k in the first month to around $40k a month now. I need about $60k for a second van and tools so I can put on an apprentice. I own a unit with a small mortgage.”

Illustrative example only.

A purchased business:

“I bought an existing cafe five months ago. It’s traded for about six years under the previous owner. Since I took over, deposits have been around $55k a month, similar to before. I need about $35k for a new coffee machine and some fit-out work.”

Illustrative example only.

Both give the specialist the context to see past the short trading period.

Why experience and context matter

A business that’s six months old but run by someone with fifteen years in the industry is a different proposition from a first venture in an unfamiliar field. The ABN might be new; the know-how isn’t. Say so. Similarly, if you’ve changed structure, for example moving from sole trader to company, the underlying business may have a much longer history than the new ABN suggests. Mention the change and when it happened.

Where property fits

For very new businesses, property security often makes the difference. Property-secured business loans from $20,000 to $5,000,000 can place more weight on the property and the plan for repaying the loan than on months of trading. If you own property but would rather not use it, say that too. Our page on describing property as security covers the details.

Without property, unsecured options for trading businesses are typically $5,000 to $500,000, sized on turnover and bank statements. With only a few months of statements, the amounts available may be modest at first. See how to describe turnover.

Showing the plan

For newer businesses, a simple plan can help: what the money buys, what it will earn or save, and how repayments fit. It doesn’t need to be a formal business plan. A one-page cash flow outline is often enough. business.gov.au has a free cash flow statement template if you’d like a starting point, and our page on working out how much to ask for helps with the numbers.

What to expect on the call

The specialist will tell you honestly where you stand:

Your situation	What’s often realistic
A few months trading, no property	Limited options; sometimes worth waiting for more history
A few months trading, property available	Property-secured options may work
Purchased business with long history	The business’s own history can help
Changed structure, long underlying history	Explain the change; the history may still count

If the answer is “not yet”, you’ll know roughly when things are likely to change, so you can plan.

Common situations for newer businesses

Every newer business is different, but a few situations come up again and again on our calls:

• Stepping out on your own after years as an employee. You might be a new ABN with a long track record in the trade. Lead with the experience.
• Buying into an existing business. Tell us what’s being bought, the price, the settlement date and how long the business has traded. The history you’re buying matters.
• A second site or location. If your first site has traded for a while and the new one is starting, the established site’s trading is usually what a lender will look at.
• A fast-growing young business. If deposits have risen quickly, say so and show the trend. A lender may still want more months of history, but the direction helps.
• Changing from sole trader to company. Explain when you changed and that it’s the same business. The new ABN won’t show the years before.

In each case, the principle is the same: give the specialist the context the ABN date can’t. If you’re not sure whether to call or fill in the form first, our page on phone or online will help you choose. It’s also worth scanning the questions a specialist will ask, because newer businesses tend to get a few extra about background and plans.

Ready to talk it through?

Ring 03 4059 1829 with your trading time, monthly deposits, purpose and property position. Or send the 60-second enquiry and a specialist will ring you. There’s no credit check when you first enquire, your details stay with one team instead of a queue of lenders, and you’ll get a straight answer about what’s realistic now. Accurate numbers, even from a short history, are what let us match a newer business properly.