Quick answer
Beyond a bank loan, Australian startups can raise money from customers (pre-sales and deposits), suppliers (trading terms), asset finance on the equipment itself, government incentives such as the R&D Tax Incentive, equity from angels or crowdfunding, or a loan secured by property. The right mix depends on whether the business has revenue, hard assets or a genuinely scalable product.
Key points
- Match the money to the need: equipment suits asset finance, stock suits supplier terms, an unproven product suits equity
- Equity crowdfunding is capped at $5m in any 12 months, and retail investors can put in only $10,000 a year per company
- The R&D Tax Incentive and ESIC tax offsets reward spending and investors, but neither pays you up front
- Property security can fund a startup that has no trading history, at the cost of putting an asset at risk
- Banks are often the cheapest money once a business has a track record, so plan how you will refinance into one
Most founders start the same way: an idea, a few thousand dollars of savings and a bank branch that politely explains it lends against track records. That is fair. A bank can’t see two years of profit in a business that hasn’t opened yet, and when you do have a history, bank finance is frequently the cheapest money going.
But “the bank won’t lend yet” is a long way from “there is nowhere to go”. This guide covers eight routes, who each suits, and the catches that rarely make the brochure. Our broader overview, how to fund a startup in Australia, covers the basics; here we go deeper on the alternatives.
Which kind of startup are you?
The funding that works depends less on your industry than on what the business is made of. Most startups fall into one of three shapes.
| Shape | What it looks like | Natural funding |
|---|---|---|
| Asset-heavy | Café fit-out, workshop, vehicles, clinic equipment | Asset finance, property-secured loan |
| Stock-and-sales | Retail, wholesale, e-commerce | Supplier terms, pre-orders, a line of credit later |
| Product-led | Software, medtech, a patentable invention | Equity, tax incentives, grants |
Choosing a route that doesn’t match your shape is the commonest startup funding mistake. Raising equity to buy an espresso machine gives away a slice of the business for something a lender would finance against the machine itself. Borrowing on a short term to build software with no revenue date puts repayments on a business that can’t yet make them.
1. Customers: pre-sales, deposits and early invoices
The cheapest source of startup money is a customer who pays before you deliver. A bespoke furniture maker takes 30% deposits. A caterer asks for payment on booking. A software founder sells annual plans at a discount to the first fifty users.
Pre-sales also prove demand, which is exactly what every later funder wants to see. The risk is obligation: if you take deposits and then can’t deliver, you owe the money back and your reputation suffers. Keep deposits in a separate account until the work is done.
2. Suppliers: terms instead of cash
A supplier who gives 30 days to pay is lending you the cost of that stock for a month, free. New businesses rarely get terms on day one, but a short trading history with a small cash-on-delivery order often converts to an account. Our guide on negotiating better supplier terms shows how to ask.
3. The asset itself: equipment and vehicle finance
If a hard asset does the earning, finance the asset. A chattel mortgage, hire purchase or lease is secured on the equipment, so the lender’s decision rests on its value and resale market more than on your trading history. See equipment finance for new businesses for what lenders typically ask of a young business, and the leasing vs buying comparison for the structure.
Expect a deposit, and expect a personal guarantee from the owners. Used equipment can be financed too, though the lender will want a clear valuation or invoice.
4. Government money: incentives rather than gifts
Grants exist, but they are competitive, usually match-funded, and rarely arrive before you need to spend. Tax incentives are more reliable for the right business, and two matter for founders.
- R&D Tax Incentive. If you spend on eligible research and development, the incentive offsets some of that cost through your tax return, after you register the activities with AusIndustry. Business.gov.au says the Government announced changes in the 2026-27 Budget, starting 1 July 2028, with current rules applying until then. Because it’s claimed after spending, it rewards you for what you have already funded; it doesn’t replace the funding.
- Early stage innovation company (ESIC) offsets. These work on the investor’s side: qualifying angel investors can receive a tax offset, which makes your pitch easier. The ATO’s figures show a 20% non-refundable offset capped at $200,000 a year for sophisticated investors, with a much lower cap of $50,000 of investment for non-sophisticated ones. Your company has to pass the ESIC tests, and a documented R&D claim can help with the innovation test.
Both are worth a conversation with an accountant who works with innovation businesses. Neither will fix a cash gap next month.
5. Equity: angels, friends and crowdfunding
Equity doesn’t need repayments, and that is both its appeal and its cost. Every share you issue is a permanent claim on the upside.
Equity crowdfunding is open to more startups than founders realise. ASIC says eligible unlisted public and proprietary companies with under $25m in assets and annual turnover can raise up to $5m in any 12-month period through a licensed intermediary. Retail investors can invest only $10,000 a year per company, so you need a crowd, not a whale. Proprietary companies must have at least two directors and prepare annual reports, and financial reports must be audited once $3m or more has been raised.
That is a real compliance load, and a campaign needs marketing like a product launch. It works best for businesses with a loyal customer base, such as a craft brewer or a community-focused brand.
6. Your super? Be careful
Some overseas countries let people roll retirement savings into a new business. Australia doesn’t. Super is preserved until a condition of release is met, and the ATO warns that promoters who offer early access, usually by shifting money into a freshly set-up SMSF, are running illegal schemes. People caught up in them can face tax penalties on the amount released. If someone offers you “your own money, tax-free, now”, walk away and speak to your fund.
7. Property security: the way founders avoid giving up equity
If you or a family member owns property with spare equity, a loan secured on it can fund a startup with no trading history. Lenders that lend on property are looking at the asset and your exit, not at a year of statements. We explain how this works in how to borrow against property for your business.
The trade-off is plain: a business that fails can cost you the property. Keep the borrowing modest, leave a repayment buffer, and read our piece on risks of using your home as business security before signing.
8. A startup loan, once there is something to assess
Unsecured startup lending exists, though it’s generally limited to the smaller end of the market and usually asks for a few months of trading, an ABN and a reasonable bank-statement picture. Our startup business loans page sets out what lenders check, and the ABN under 12 months page covers the first year.
Wondering which of these fits your plan? Tell us what you’re building and what it needs. It takes about a minute, and nothing is checked on your credit file.
A worked example: a coffee roaster with $90k to find
This is an illustration only. Dani plans a small roastery. The budget is a $55k roaster and packing line, $20k for the lease deposit and fit-out, and $15k of green beans and packaging.
- Roaster and packing line, $55k: asset finance with a 20% deposit ($11k), leaving $44k financed against the machine.
- Beans and packaging, $15k: two suppliers agree 14-day terms on the second order, and Dani sells wholesale subscriptions with payment up front to a dozen local cafés.
- Lease and fit-out, $20k: Dani’s savings, because landlords don’t accept finance as a deposit and a fit-out is hard to borrow against.
No investor, no giving up shares and no property at risk. The startup is funded from three different pockets because each need has a different shape. That is the principle in the whole guide.
What to prepare before approaching anyone
Funders of every kind ask for variations on the same pack: a one-page plan with realistic sales, a 12-month cash flow, quotes for any assets, identification and your entity details (ABN, ACN, trust deed where relevant), and a clear statement of how much you are putting in yourself. Our 13-week cash flow forecast guide is a practical template.
Your next step: find the route that keeps you in control
Banks are an excellent long-term partner, and the day your trading record fits their criteria, take their offer seriously. If you’re not there yet, or the answer already came back no, the options above are all open to you.
If part of your plan needs a loan, ask us. The form takes about a minute, and your credit file isn’t touched when you enquire. Your details aren’t scattered across a pile of lenders, so you won’t field calls from strangers. A real person reads your answers, thinks about the shape of your business and rings you to talk it through. Fill it in accurately, with honest figures for what you’ve saved and what you need, so the first option we suggest is the one that suits.
Frequently asked questions
What can a startup use instead of a bank loan?
The usual alternatives are customer deposits and pre-sales, supplier credit, equipment or vehicle finance secured on the asset, government grants and tax incentives, angel or crowdfunded equity, and a loan secured against property. Each has a different cost: equity costs ownership, while finance costs repayments.
How much can a startup raise through equity crowdfunding in Australia?
According to ASIC, eligible unlisted companies with less than $25m in assets and turnover can raise up to $5m in any 12-month period. Retail investors are limited to $10,000 per company per year, and there is a five-day cooling-off period for investors.
Can I use my super to start a business?
Generally no. Super is preserved until you meet a condition of release, and the ATO warns that promoters offering early access through a new SMSF are running illegal schemes that can be prosecuted. Speak to a registered adviser before moving any retirement money.
Is the R&D Tax Incentive a grant?
No. It is a tax offset claimed after you have spent money on eligible research and development, and you register the activities with AusIndustry first. Business.gov.au notes the Government announced changes in the 2026-27 Budget starting 1 July 2028, with current rules applying until then.
Can a brand-new business get a loan without trading history?
Yes, usually when there is security. Lenders who rely on property or equipment value look at the asset and your plan to repay, not two years of accounts. Unsecured lenders generally want some months of trading and bank-statement turnover first.
Should I take investors or borrow?
Borrow when the money funds something with a predictable payback, such as equipment or stock. Take equity when the outcome is uncertain and the upside is large. Giving away 10% of a business that later becomes valuable can cost far more than a few years of loan repayments.