Quick answer
How much your business can borrow is usually the lowest of three limits: a turnover ceiling (unsecured lenders often cap loans at a fraction of annual sales), a serviceability ceiling (the repayment your monthly surplus can carry with a buffer), and a security ceiling (a percentage of the value of property or assets offered, less existing debt). Raise the lowest one and your borrowing power rises.
Key points
- Lenders don't pick a number from thin air; they apply three tests and lend up to the lowest
- Unsecured limits scale with turnover and bank-statement conduct, typically $5k to $500k
- Serviceability looks at surplus cash after all repayments, with a buffer for a bad month
- Property security can lift the ceiling dramatically, but only by the equity above existing loans
- Asking for far more than your numbers support can turn an easy yes into a no
There’s no single number for how much a business can borrow, but there is a reliable method. Nearly every Australian business lender, from a fintech approving $30k online to a bank lending $2m against a warehouse, works out three separate limits and then lends up to the lowest of them.
Think of them as three ceilings in the same room. The lowest one is the one you hit your head on. Knowing which is lowest for your business tells you what to expect, and what to change if you need more.
If you’d prefer the quick answer, plug your figures into the business borrowing power calculator. This guide explains the reasoning behind it so you can read the result with confidence.
Ceiling one: what your turnover supports
Unsecured lenders, especially fintechs, start with sales. They want to see money flowing into the account steadily, and they size loans as a proportion of it.
Published criteria give a feel for the scale. As at October 2026:
| Lender | Product | Published minimum to apply | Published amount range |
|---|---|---|---|
| Prospa | Small Business Loan | 6 months trading, $6k monthly turnover | $5k to $500k |
| Prospa | Business Loan Plus | 3 years trading, $2m annual turnover, property or asset ownership | $500k to $1m |
| Moula | Business loan | 12 months trading, $10k monthly sales, GST registered | $10k to $500k |
Notice what the Prospa row implies. To be considered for between $500k and $1m unsecured, the lender wants at least $2m of annual sales, so even its larger product sits at well under half a year’s turnover. Meeting a minimum doesn’t mean being offered the maximum. A business turning over $8k a month that clears Prospa’s $6k threshold won’t be offered anything near $500k.
In practice, the offer an unsecured lender makes depends on:
- Typical monthly takings across the last half-year or year, usually ignoring one-off windfalls
- Consistency: a steady $60k every month is worth more than an average of $60k made of big and empty months
- Trading history: longer history, larger limits
- Existing debts: other lenders’ repayments are subtracted from the capacity
- Conduct: negative days, dishonours and gambling all shrink the offer
Your sales ceiling is the figure most fintechs will quote first. For a fuller explanation of how unsecured loans are sized, see unsecured business loans and the unsecured business loan calculator.
Ceiling two: what your cash surplus can service
The second ceiling asks whether the business can actually afford the repayment, month in, month out, with room for a bad month. Lenders call this serviceability.
The basic arithmetic:
- Start with earnings before interest, tax, depreciation and amortisation (roughly, profit with non-cash and financing costs put back). If profit and cash flow terms blur together, business.gov.au keeps a plain list of key financial terms.
- Add back genuine one-offs and items like owner salary above a market wage, where your accountant can support it.
- Subtract what the owners need to live on, if they’re drawing it from the business.
- Divide by all debt repayments for the year, including the proposed new loan.
The result is the debt service coverage ratio. Lenders want it comfortably above 1.0; many look for something in the region of 1.25 to 1.5, so that a 20% dip in earnings doesn’t mean a missed payment. Run yours in the DSCR calculator.
Turning the ratio into a borrowing limit
Flip the sum around. If a lender wants a coverage of 1.3 and your business has $130k a year available to service debt, the total annual repayments it will accept are $100k. Subtract existing repayments (say $40k on equipment and a vehicle) and $60k a year, or $5k a month, is left for the new loan.
How much that $5k a month buys depends on the loan term and the cost the lender quotes. Over five years it supports a much bigger loan than over one year. That’s why a longer term can sometimes unlock a larger amount: the same monthly repayment services more principal. The business loan repayment calculator will show what a monthly repayment supports for the term you’re considering.
Low doc and fintech lenders run the same logic using bank statements and BAS rather than financial statements, but the question doesn’t change: is there enough left over?
Not sure where your own ceiling sits? Share a few numbers and a real person will tell you, with no credit enquiry made.
Ceiling three: what your security is worth
The third ceiling only applies when you offer security, and for many owners it’s the one that changes everything.
Lenders lend up to a percentage of the security’s value, called the loan-to-value ratio or LVR, and then subtract any existing debt against it. The percentage varies by lender, loan type and asset. Broadly:
| Security | How lenders tend to view it |
|---|---|
| Residential property in a capital city | The most accepted security; higher LVRs available |
| Residential property in a regional town | Accepted; some lenders reduce the maximum LVR |
| Commercial or industrial property | Accepted; usually a lower maximum LVR than residential |
| Rural property | Specialist lenders; valuation depends on land use |
| Vacant land | Limited lenders; lower maximum LVRs |
| Equipment and vehicles | The asset secures its own finance; amount tied to the purchase price |
| Invoices (receivables) | A percentage of approved invoices, rising and falling with sales |
The equity sum
Here’s the calculation for property:
Maximum total lending = property value × maximum LVR Available for the new loan = maximum total lending − existing mortgages
So a home valued at $1.2m, with a lender willing to go to 70% total LVR, supports $840k of total lending. If the existing mortgage is $520k, the security ceiling for a new business loan is $320k.
That’s only an estimate until a valuer reports. A valuation that comes in $100k lower knocks $70k off the ceiling at the same LVR. Our guide to calculating usable equity goes through the traps, and the LVR calculator does the sums for you.
For property-backed business lending, the range we can help with is $20k to $5m. Some of the property-secured options come through our own lenders, HomeSec Business Finance and EquityTap.
Putting the three ceilings together: a worked example
Here’s an illustration. A family-owned plumbing company on the Gold Coast wants $250k to buy out a retiring partner’s share and fund two new vans.
Turnover ceiling. Average monthly deposits are $95k across twelve months, steady through the year. An unsecured lender indicates it could look at up to about $150k based on sales and conduct.
Serviceability ceiling. Adjusted earnings are $210k a year. Existing van and equipment repayments are $48k. At a coverage requirement of 1.3, total repayments can reach about $161k, leaving roughly $113k a year for the new loan. Spread over five years, that comfortably supports $250k; over one year, it wouldn’t.
Security ceiling. The directors’ home is worth $1.4m with a $610k mortgage. At a 70% maximum total LVR, total lending could reach $980k, leaving about $370k of security capacity.
Result. Unsecured, the business hits the turnover ceiling at about $150k. With the home offered as security and a five-year term, the lowest ceiling becomes serviceability, which supports the full $250k. The owners can now make an informed choice between borrowing less unsecured, or borrowing the full amount against the home. The second is cheaper and bigger; the first keeps the house out of it.
How to raise your lowest ceiling
Once you know which ceiling is lowest, you know where to work.
If turnover is the limit:
- Wait a few months for a longer record of steady sales
- Move all trading income into the account the lender reviews
- Consider security, which removes the turnover cap
If serviceability is the limit:
- Ask for a longer term to reduce the monthly repayment
- Refinance or pay out expensive existing debts first
- Reduce credit card limits you don’t use
- Supply an add-back schedule if your accounts understate cash earnings
If security is the limit:
- Offer an additional property, or a guarantor’s property
- Get an independent sense of value before the lender’s valuation
- Consider whether part of the need suits equipment finance, which doesn’t draw on property
Why asking for too much can backfire
There’s a temptation to ask high and accept what’s offered. It often goes wrong. An assessor who sees $400k requested by a business that obviously supports $180k may conclude the owner doesn’t understand their own numbers, and decline rather than counter-offer. Some lenders will scale back; many simply say no.
If a bank has already offered less than you asked, our page on when the bank offers less than you asked for covers the realistic next steps, including topping up with a second lender.
Know your number? Let’s find who’ll lend it
Working out your three ceilings is the hard part. What remains is finding a lender whose policy treats your strongest ceiling generously: a sales-focused fintech, a bank that rewards strong serviceability, or a property lender that makes the most of your equity.
It takes around one minute to send us an enquiry, and your credit file isn’t looked at for it. We don’t fan your details out across a network of lenders, which keeps unfamiliar numbers off your screen. Instead, someone on our team takes a proper look at your numbers and calls you. Put in your real turnover, debts and property values; a truthful snapshot lets us aim at the right lender straight away.
Frequently asked questions
How much can a small business borrow without security?
Unsecured business loans in Australia typically range from $5k to around $500k, with the amount tied to turnover, trading history and account conduct. A business with modest monthly sales will usually be offered a small fraction of that upper figure. Larger unsecured amounts generally need several years of trading and higher turnover.
Can I borrow more if I use my house as security?
Often, yes. Property security lets a lender lend against the equity in the home, the value above any existing mortgage, up to its maximum loan-to-value ratio. The business still has to show it can service the loan, at least with banks, and your home is at risk if the loan isn't repaid.
Do lenders use profit or turnover to work out how much I can borrow?
Both, for different purposes. Turnover often sets the upper limit for unsecured lending and shows scale. Profit, or more precisely cash surplus after expenses and existing debts, decides whether the repayments are affordable. A high-turnover business with thin margins may borrow less than expected.
Why did the lender offer less than I asked for?
Usually because one of the three ceilings came in below your request: your surplus didn't cover a larger repayment with enough buffer, your turnover capped the unsecured amount, or the property valuation was lower than expected. Ask which test limited the offer, because that tells you what would change it.
Does my existing debt reduce how much I can borrow?
Yes, in two ways. Existing repayments reduce the surplus available for a new loan, and existing loans against a property reduce the equity available as security. Credit card limits count too, often at the full limit rather than the balance.