How long do you need to be trading to get a business loan?

“How long do I need to have been trading?” is one of the first questions new business owners ask. It’s a good one, because time in business shapes which doors are open. The honest answer is “it depends on the lender and the loan”, so this lesson explains what it depends on.

Why do lenders care how long you’ve been trading?

Think about how you’d judge a new neighbour’s promise to return your trailer. If you’ve known them for three years and they’ve always been reliable, you’d feel fine. If they moved in last week, you’d want a bit more reassurance.

Lenders feel the same. A business with a longer track record has already shown:

• it can find customers and keep them
• it survives quiet months and busy ones
• the owner can manage money over time

A brand-new business might do all of that brilliantly, but there’s simply less evidence yet. That’s not a judgement about you. It’s just less information for the lender to go on.

How do lenders measure time in business?

Usually from two things:

1. Your ABN registration date. It’s public, so it’s easy to check on ABN Lookup.
2. Your business bank account history. Lenders want to see the business actually trading, not just registered.

Note that having an ABN isn’t the same as trading. The ABR explains an ABN is for people carrying on or starting an enterprise, and sets out signs of genuine business activity like regular commercial sales, keeping records and operating like others in the same industry. Lenders are looking for exactly that: real, regular trading.

What do different lenders typically expect?

These are broad patterns, not promises. Every lender sets its own policy.

Lender and loan type	Typical attitude to trading time
Bank, unsecured	Often looks for two years or more, with tax returns and financials
Bank, secured	May accept less history with strong property security
Non-bank, unsecured	Some consider shorter histories with steady deposits
Non-bank, property-secured	Can be flexible, as the property is the main safety net

So a business with limited history isn’t locked out. It might just be a better fit for a different lender or a different kind of loan. Lesson seven in Stage 1 explains banks vs non-bank lenders if that’s new to you.

Does quality beat quantity?

Often, yes. A lender would usually rather see:

• 12 months of steady, regular deposits into a dedicated business account, than
• four years of patchy, mixed personal-and-business banking with big unexplained gaps.

Consistency tells a clearer story than length alone. That’s great news if you’re newer: from today, every month of tidy banking adds to your case. Our lesson on turnover and bank statements shows what “tidy” looks like.

Illustrative example. Mia opened her mobile hairdressing business 10 months ago. She worked in salons for eight years first. All her income goes into one business account, she’s lodged every BAS on time and her deposits are steady week to week. She wants $15,000 for a second chair and equipment for a small studio. Her short history counts against her with some lenders, but her industry experience, tidy banking and modest request put her in a much better spot than her ABN date alone suggests. (Illustrative only.)

Newer business with a plan? Ask what’s possible. It’s a no-credit-check conversation, and a real person will tell you honestly whether now is the right time.

What if you own property but the business is new?

This is where property security can change the picture. Because the lender has a safety net, property-secured business loans from $20,000 to $5,000,000 can be possible for businesses that are still building a trading history. The lender still wants a sensible purpose and a believable repayment plan, but the property carries much of the weight.

If that’s you, lesson six covers borrowing against property step by step.

What can you do now to build your track record?

If you’re early in business, here’s how to make every month count:

• Use one business account for all business income and spending.
• Invoice properly and bank every payment, including cash.
• Lodge your BAS on time, even if you can’t pay it all at once.
• Keep bookkeeping up to date, monthly if you can.
• Avoid unnecessary credit applications, which can leave marks on your file.
• Write down your industry experience, qualifications and key clients. It’s all useful context.

Then run the loan-readiness quiz every few months to see your score climb.

Myths about trading history

“You need two years or nobody will lend.” Many banks prefer two years, but plenty of lenders consider less, especially with steady deposits or property security.

“My ABN date is all that matters.” Lenders also look at your bank statements to confirm the business was genuinely trading.

“Years working for someone else don’t count.” They’re not the same as business history, but industry experience is useful context. Mention it.

Is it the right time to ask?

If you’ve been trading a while, or you’re newer but own property, it’s probably worth a conversation now rather than guessing.

Enquiring takes about a minute and involves no credit check. Your details stay with the person handling them; we don’t scatter them across a list of lenders. A real person looks at how long you’ve traded, what’s coming in and any security, then tells you plainly what’s realistic now and what would help later. Please be accurate about when you started trading, as that one answer shapes which options fit.

Find out if now’s the right time →