“You Need Two Years in Business Before You Can Get Finance.” Not Anymore.
This week we took an application from a client who had been putting off much-needed working capital finance because his accountant told him he had to wait two years before any bank would look at him.
Once upon a time, that was common advice. It isn’t anymore.
That conversation happens more often than you’d think. And every time it does, a business owner can end up delaying growth, turning down work or funding something themselves that a lender may have been willing to finance.
That’s why we’re doing something about it.
Why Now? Queensland Is About to Get Very, Very Busy
South East Queensland is heading into a significant construction and housing pipeline. Queensland’s major project pipeline has surged past $127 billion, according to the Queensland Major Contractors Association’s latest Major Projects Pipeline Report, with infrastructure, housing, energy and transport projects stretching beyond 2030.
That means opportunity for the trades, transport and logistics, professional services, hospitality and almost every business that supports a growing region.
But opportunity has a habit of arriving before the cash does.
The businesses that make the most of the next decade will be the ones that can access the right funding at the right time.
So we’re launching a series of practical education pieces covering every stage of the business lifecycle, from before you register an ABN through to the lender milestones most business owners have never heard of, all the way to established businesses ready to acquire and expand.
At each stage, we’ll show you what’s possible, what lenders are actually looking for and how we help Queensland businesses get the best result.
This week: Stage 1 — before you start.
Stage 1: Before You Start — Put Your Business Plan on Paper
Thinking of starting a business? Great.
The single best thing you can do, both for your business and your future borrowing power, is put your plan on paper.
Lenders aren’t fans of the “build it and they will come” plan. They know everyone has to start somewhere, but they also know from decades of lending experience which factors can indicate whether a new business is likely to succeed.
When a lender assesses a brand-new venture, here’s what they want to see:
- You’ve thought it through in detail. Not a vague idea, but a considered plan covering what you’ll sell, who you’ll sell to, your pricing and your competitors.
- You have experience in your chosen market. A sparky starting an electrical business presents a very different proposition to a sparky opening a café.
- You’ve already approached potential clients. Owners who line up customers before committing capital can demonstrate strong commercial planning.
- You’ve modelled income and expenses for the first 12 months. The first year is crucial, so show that you understand what’s coming.
- You have a fallback position. Home equity, savings or a working spouse’s income can demonstrate that you have a plan if the business takes longer than expected to build.
- You can manage cash flow and repay debt. A clean credit history and evidence of meeting existing commitments can strengthen an application.
The Three Documents That Can Strengthen a New Business Finance Application
As a general rule of thumb, three documents, ideally prepared with your accountant, can do double duty. They provide a clear pathway for the business and can materially strengthen a finance application:
- A resume: Your experience and qualifications in the industry you’re entering.
- A business plan: The detailed, thought-through version, not the napkin sketch.
- A three-way cash flow projection: Linked balance sheet, profit and loss and cash flow forecasts.
With these in hand, funding may be achievable for big-ticket items that many people assume are off-limits to a new business, including trucks, trailers, fitouts, franchise fees and even business acquisitions.
Business acquisition finance deserves its own instalment. We’ll cover that later in the series.
Need a Car or Ute? Day-One Finance Is Possible
Here’s the part that surprises many new business owners: vehicle finance can be available from day one, and it generally doesn’t require the same depth of application as trucks and major equipment.
In some cases, you may not need a deposit.
A number of lenders have dedicated “tradie” policies designed for new businesses. A plumber with a clean credit history, for example, may be able to finance a work ute at a competitive rate with evidence of their trade qualifications.
And it’s not limited to traditional trades such as plumbing, carpentry and electrical. Similar lending policies can apply to qualified occupations such as hairdressing, while dedicated professional packages may be available to solicitors, accountants and other professionals.
The catch?
These policies aren’t necessarily advertised on comparison websites.
It comes down to presenting your application to the right lender, with the right information and the right advocacy, through an experienced broker who understands which lenders are more likely to suit different applicants.
Invoicing Other Businesses? Invoice Factoring Can Work from Day One
Here’s another option many new business owners aren’t aware of: invoice factoring can be available from day one if your business invoices established, creditworthy businesses.
Instead of waiting 30, 60 or 90 days for invoices to be paid, a suitable lending partner may advance you a significant portion of the invoice value upfront.
That turns outstanding invoices into working capital before they’re due.
Because the lender can assess the credit strength of your customers rather than relying solely on your business’s trading history, a brand-new business invoicing established companies may be able to qualify immediately.
With major construction projects rolling out across South East Queensland, this can be particularly relevant for subcontractors.
Winning a contract with a major builder is great. Funding wages and materials while you wait to be paid is where new businesses can come unstuck.
Invoice factoring can help close that cash flow gap from day one.
The Next Milestone: Three Months of Trading
Most business owners assume lender appetite changes dramatically at the two-year mark.
In reality, important lending milestones can arrive much sooner.
The first big one is three months of trading.
At three months, with proof of trading through electronic bank statements, lending options can open up for a wider range of specialised equipment.
We’ll unpack exactly what can become available at three, six, twelve and twenty-four months in the coming instalments.
Knowing these milestones ahead of time means you can plan purchases around them instead of being surprised by them.
Why Work With Brokers Who've Actually Run Businesses?
One thing our clients consistently tell us is that it matters that our brokers have both run large businesses and owned their own.
We know the effort behind the scenes. We understand the stress of payroll, the grind of accounts and the weight of knowing every decision has the potential to cost you dearly.
You wouldn’t buy a house from someone who’s never owned property.
We believe having a broker on your side who understands what business owners go through, understands what lenders are looking for and thinks beyond the immediate loan can make a real difference.
The goal isn’t simply to get a loan approved. It’s to place finance strategically so it supports where your business is going next.
Frequently Asked Questions About New Business Finance
Do I really need two years in business to get a business loan in Australia?
No. Two years of trading is not a universal requirement for business finance. Vehicle finance can be available from day one for eligible applicants, while specialised equipment finance can become available from around three months of trading. Options can continue to broaden as your business reaches further trading milestones.
Can I get car finance with a brand-new ABN?
Yes. Some lenders offer day-one vehicle finance for new ABN holders, particularly trade-qualified applicants with clean credit. Depending on the lender and applicant, a deposit may not be required.
What documents do I need for new business finance?
At minimum, you’ll generally need identification, evidence of your qualifications or industry experience and a satisfactory credit history. For larger finance applications, a business plan and accountant-prepared three-way cash flow forecast can significantly strengthen your application.
What is a three-way cash flow projection?
A three-way cash flow projection is a set of linked financial forecasts covering your profit and loss, balance sheet and cash flow. It typically shows how money is expected to move through the business over a 12-month period.
Can a brand-new business use invoice factoring?
Yes. Invoice factoring may be available from day one if a new business invoices established, creditworthy businesses. The lender can assess the credit strength of your customers and advance funds against eligible invoices before they’re due, subject to their criteria.
Do “tradie” finance policies only apply to traditional trades?
No. While plumbers, carpenters and electricians are common examples, similar day-one vehicle finance policies can extend to other qualified occupations. Separate professional packages may also be available for professions such as solicitors and accountants.
How long do you need to be in business to get equipment finance?
It depends on the lender, the type of equipment and your circumstances. Some vehicle finance can be available from day one, while a wider range of equipment finance options may become available after around three months of trading. Lender criteria vary.
Ready to Start? Talk to Us First
If you’re planning a new venture anywhere in Queensland, or you’ve already started and were told to come back in two years, talk to us before you make your next move.
A short conversation now could save you months of waiting that you may not have needed to do.
Next in the series: The 3-month milestone — what opens up once you can show your first bank statements.
Finance is subject to lender criteria, credit assessment and approval. This article is general information only and doesn’t take your personal circumstances into account.