From assisting kickstarting finances to open a new business, to expanding operations in an existing company, business owners seek business loans for various financial reasons.
Whether it be to keep cash flow moving, alleviate operational expenses, equipment or commercial vehicles, or long-term working capital – business loans can help steady a business through new or difficult periods or simply take things to the next level.
When applying for a business loan, there are several factors to consider and documents to provide to the lender. Having a checklist can improve your chances of approval and speed up the process.
Having a clear understanding of what is required and what lenders will generally approve (and not approve) for a business loan can mean getting approved for a loan the first time around.
The Approval Process: The 5Cs
To evaluate business loan applications, lenders generally assess five key factors, known as the 5Cs:
- Character: Character is all about trust. Lenders look at track records, credit scores, and business reputation to gauge character and, ultimately, reliability.
- Capacity: A lender will survey the borrower and the business’s capacity to repay the loan. This involves assessing the debt-to-income (DTI) ratio, financial forecast, cash flow, and budgeted profit and loss statement.
- Capital: Lenders utilise previous financial statements, any outstanding obligations to the ATO, and credit reports to verify whether the business has adequate funds to cover repayments.
- Conditions: Lenders look at the general conditions relating to the loan and consider the borrower’s ability to meet the terms. They also consider how repayments can be affected by external factors, like the economy and industry fluctuations.
- Collateral: When hard assets secure an investment, lenders feel more assured in their lending decisions. Collateral can include hard assets, real estate, vehicles, cash, inventory, and guarantors to meet repayment agreements.
Business Loan Application Simplified
Using a checklist when applying for a business loan will streamline the application process and help increase the chances of faster approval.
Before U Loan is powered by Australia’s best finance brokers, who will do all the heavy lifting for you – all you need to do is submit your details. Our network of brokers can find you the best business loans with flexible repayment agreements to suit your business’s financial needs and circumstances. Contact the team at Before U Loan today.

We're here to help with loans
beforeuloan.com
Need help buying, refinancing or navigating a complex situation?
Good finance and mortgage brokers are worth their weight in gold. Search our broker directory to find a recommended, accredited broker.
beforeuloan.com is backed by Australia's leading national association for finance and mortgage brokers, FBAA. Brokers ensure loan customers like you have choice, transparency and confidence in the market.
Be the first one to know about discounts, offers and events weekly in your mailbox. Unsubscribe anytime.