Startup business loans are loans for new businesses that cannot yet show trading history. A bank wants years of accounts; a startup has a plan and a deadline. The workable routes are property-secured funding, a guarantee from someone with assets, or a staged approach that builds statements first. This page explains each and when to use it.
Why is it hard for a startup to get a business loan?
It is hard because lenders judge repayment ability from evidence, and a new business has none yet. The business.gov.au guide to applying for a business loan names what lenders usually ask for, and the list includes cash flow statements and financial reports. A brand-new business can supply the plan and the ID, but not the reports.
The same government guidance says investors and lenders expect some self-funding before they offer finance. Founders who have put in nothing of their own look like the lender is carrying all the risk.
The scale of the problem is large. The Australian Bureau of Statistics counted 460,461 business entries in 2025-26, against 375,331 exits, so new businesses start constantly and lenders have learned to be careful with them. Careful is not the same as closed. It means the lender looks for something other than a history.
What do lenders look at instead of trading history?
They look at security, the people and the pay-back plan. With no accounts to read, three things carry the file:
- Security. Equity in a residential or commercial property, usually owned by a founder or a guarantor, gives the lender something to fall back on.
- The borrower’s position. Existing income, personal assets and how much of their own money they are putting in.
- The exit. A concrete way the loan gets cleared: a signed customer contract, a refinance after the first quarter’s trading, a sale of another asset.
This is why property-secured funding is the natural startup route. It does not ask a business to prove something it cannot yet prove. Amounts are large, often into the millions, and our page on second mortgages explains how one sits behind an existing bank loan.
What startup funding options exist?
There are five realistic routes, and most founders end up using a mix. The table compares them.
| Route | Needs trading history? | Relies on | Typical timing | Watch out for |
|---|---|---|---|---|
| Property-secured private loan | No | Equity in property and a clear exit | Days | Cost; the property is at risk |
| Guarantor-backed loan | No | A guarantor’s assets or income | Days to weeks | The guarantor’s liability |
| Unsecured loan | Generally yes, a few months | Bank statements and turnover | Days once statements exist | Smaller amounts |
| Equipment finance | No | The asset being financed | Days | Only for the asset itself |
| Self-funding or equity | No | Savings or investors | Varies | Giving up ownership or dipping into savings |
Business.gov.au separates funding into debt, where you borrow and keep ownership, and equity, where you hand over part of the business. Debt keeps control with you; equity removes repayments. Loans suit a business whose income is predictable, while equity suits a business that may take years to earn.
Can I get an unsecured loan as a startup?
Rarely at the very start, because unsecured loans are assessed on turnover and bank statements. A business that opened last week has neither. After a few months of consistent takings through a business account, unsecured options open up, typically from $5,000 to $500,000 depending on turnover.
The practical advice is to open a dedicated business bank account on day one and run everything through it. Mixed personal and business transactions make statements harder for a lender to read, and every month of clean history strengthens the next application. Our page on unsecured business loans covers how they are sized.
Illustrative example: a mobile coffee business launching on a contract
Illustrative example: a founder wins a six-month contract to supply coffee at a corporate site and needs $90,000 for a fitted van, machines and first-month stock. The business is three weeks old, so there are no statements. She owns an investment unit with $200,000 in equity.
The structure is a second mortgage over the unit for $90,000, with the contract payments as the named exit and an agreed plan to refinance into cheaper money once the business has six months of takings. Documents are limited to ID, entity details, title and rates information and the signed contract. The loan can be in place within days.
Round numbers, simple structure: the property carries the loan, the contract carries the repayment, and the founder is not asked to prove a history she does not have.
What about director guarantees and a guarantor?
Many startup loans involve a guarantee, which is a promise by a person to repay if the business cannot. Moneysmart warns that a guarantor can end up repaying the entire loan with interest, and may lose assets pledged as security, such as a home. It adds that a guarantee can sometimes be capped at part of the loan.
If you are asking a family member to guarantee, be straight about the risk and the exit. A written plan, a defined timeframe and a refinance target make it easier for everyone to say yes with open eyes. The secured vs unsecured business loans guide has more on how guarantees work in each structure.
What if the startup has no property and needs money now?
Then the plan has to change shape, not disappear. A founder with no property and no statements has four sensible moves, and they can be combined.
- Stage the spend. Buy only what the first contract needs, then fund the rest from takings.
- Finance the asset, not the business. Equipment finance is secured by the vehicle or machine itself, so history matters less.
- Bring in a guarantor or co-founder. Someone with property equity can change the answer, provided they understand the liability.
- Build the record. A few months of banked takings turns an impossible unsecured application into a routine one.
If none of these fit, say so on the application. Tell us what you have and what you need, and we will say plainly whether it can work now.
How do I strengthen a startup application?
You strengthen it by showing the lender everything it would otherwise have to guess. A short list:
- Put in some of your own money and say how much.
- Use a separate business bank account from day one.
- Get the ABN or ACN set up before you apply, so the borrowing entity exists.
- Bring a signed contract, quote or lease if you have one.
- Write the exit as a sentence with a date.
- Tell us about any other debts on the property.
If you would like to test the water now, you can start your application with those answers ready. If you are a sole trader launching alone, business loans for self employed covers the tax-return and ABN side. For a wider view of how loans compare with other funding, see business finance.
What does startup funding cost, and is it worth it?
Private funding is dearer than a bank loan, and every loan is priced on the borrower’s own situation. What you are paying for is speed and flexibility. A startup that borrows to win a contract worth far more than the cost can come out well ahead, while one that borrows to cover ongoing losses usually cannot.
Test the numbers before you borrow. The business loan calculator shows repayments for interest-only and principal-and-interest structures, so you can see what the loan does to cash flow in the first months. If repayments only work if everything goes perfectly, borrow less or wait.
Start with one application
You do not need to choose between secured and unsecured before you ask. Describe the business, the amount and the deadline, and mention any property. We will help match you with a path now, or tell you what to build first. The quick application takes minutes, and you can apply for startup business funding today.