How Long Must My Business Be Trading?
Most Australian equipment finance lenders prefer a minimum of 12 to 24 months of trading, though options exist for newer ABNs with strong industry experience.
How long does my business need to operate?
Generally, mainstream Australian lenders require your business to have been trading under an active ABN and GST registration for at least 12 to 24 months. Having an established trading history gives credit assessors clear visibility over your cash flow, making it easier to demonstrate serviceability for the requested equipment loan.
If your business has been operating for less than 12 months, securing equipment finance is still achievable. Specialist lenders offer start-up and low doc equipment finance policies that place greater weight on the business owner's prior industry experience, the asset's resale value, and a clean credit file rather than full financial statements.
For newer ABNs or sole traders with short trading histories, lenders may adjust their risk parameters. This might involve requiring a modest deposit to lower the Loan-to-Value Ratio (LVR), capping the maximum funding amount, or reviewing recent bank statements and interim ATO portal balances to verify ongoing revenue.
Because criteria vary significantly between commercial lenders, finding the right fit for your trading timeframe is essential. A Lonix broker can compare lenders across the market and structure the loan effectively, ensuring the application aligns with your current business situation and asset requirements.
Related questions
- Can I get equipment finance with a brand new ABN?
- Yes, select lenders offer specialised start-up equipment finance for new ABN holders, provided you have relevant industry experience or a clean personal credit history.
- What documents do I need if I have traded for less than 2 years?
- You may be asked for low doc alternatives such as recent bank statements, Business Activity Statements (BAS), or proof of prior industry experience instead of two years of full tax returns.
- Does trading time affect my equipment loan interest rate?
- Lenders view newer businesses as higher risk, which can lead to slightly higher interest rates or lower maximum LVRs compared to well-established businesses.
- Can I include a balloon payment if my business is under 12 months old?
- Some lenders permit a balloon or residual payment on equipment loans for new businesses, though approval depends on the asset type and expected depreciation over time.