Quick answer
How much a business can borrow depends on the type of loan. Unsecured lenders size loans on turnover, existing repayments and account conduct, typically within $5,000 to $500,000. Property-secured lenders size loans on usable equity and the plan to repay, from as little as $20,000 up to $5,000,000. The right amount is the one the business can repay comfortably, not the maximum on offer.
Key points
- Unsecured loans are sized as a share of turnover
- Existing repayments reduce what lenders will offer
- Secured loans are sized on equity and loan-to-value ratio
- Borrow what the business can comfortably repay
Two very different calculations
Ask five lenders how much your business can borrow and you may get five different answers. That is because lenders size loans in fundamentally different ways. Unsecured and cash flow lenders start with what flows through your bank account. Property-secured lenders start with what you own. Knowing which calculation applies to you explains most of the variation.
Unsecured: sized on turnover
An unsecured lender starts with your average monthly deposits from genuine customer receipts. It then asks how much repayment that account can carry, after existing commitments, without strain. The result is usually expressed as a share of turnover. Businesses with higher, steadier deposits qualify for more; businesses with volatile deposits, frequent overdrawn days or several existing loans qualify for less.
| Factor | Effect on unsecured amount |
|---|---|
| Higher average deposits | Increases |
| Steady or growing trend | Increases |
| Existing loan repayments | Reduces |
| Overdrawn days and dishonours | Reduces or stops |
| Longer time trading | Increases |
| Recent credit issues | Reduces |
Typical unsecured funding runs from $5,000 to $500,000. The upper end is reserved for larger, established businesses with strong statements.
Secured: sized on equity
A property-secured lender starts with the property’s value and what is already owed on it. It adds the new loan and calculates the loan-to-value ratio. The acceptable ratio depends on the property type, location, the lender’s position on the title and how the loan will be repaid. Residential property in a capital city generally supports a higher ratio than vacant land or a specialised commercial building.
The property equity calculator shows your current ratio and usable equity at different levels. Property-secured business loans run between $20k and $5m, and no valuation is needed before approval.
Repayment capacity still matters
Even on secured loans, lenders want to know how the loan will be repaid: trading income, a refinance or a sale. On property-secured loans, you can prepay interest or add it to the balance, which means the business may not need to make monthly repayments during the term. That changes the calculation: the question becomes whether the repayment source at the end is realistic, rather than whether monthly cash flow can carry the instalments.
How existing debt changes the answer
Existing debts reduce what lenders will offer, but not all debts weigh the same. A long-term equipment loan with modest monthly repayments is a small factor. Two or three short-term loans with daily debits can wipe out unsecured capacity entirely. If that is your situation, consolidating existing debts may unlock more than a new application. See business debt consolidation.
The right amount versus the maximum
Lenders tell you the most they will lend. That is not the same as the right amount. The right amount covers the need, leaves a buffer and produces repayments the business can meet in its slowest month. Run your figures through the repayment calculator and look at the repayment as a share of deposits. If it looks heavy, borrow less, extend the term or consider security.
Sizing for a specific purpose
| Purpose | How to size it |
|---|---|
| Cash flow gap | The lowest point in your balance plus a buffer |
| Stock order | The order cost less what you can fund yourself |
| Tax debt | The full balance, including interest to the payout date |
| Equipment | The price less any deposit, plus installation |
| Consolidation | The total payout figures for the debts being cleared |
The cash flow gap calculator helps with the first; the others rely on quotes and statements.
An illustrative example
A logistics business with steady monthly deposits wanted funding for two trucks and a buffer for wages. An unsecured lender offered an amount that covered one truck. The owners had equity in an investment property. A second mortgage funded the second truck and the buffer, while equipment finance covered the first truck. Combining routes gave the business what it needed without overloading any single facility.
Why two lenders give different numbers
Even within the same category, lenders weigh things differently. One unsecured lender may average twelve months of deposits; another may give more weight to the last three. One may cap total repayments at a lower share of deposits than another. One may count a payment plan with the ATO as an existing debt; another may treat it as neutral if it is being met. Secured lenders differ on which property types they accept, how much they will lend in regional areas and whether they will take a second position behind a bank.
That is why shopping the same application to many lenders is a poor way to discover your number. It produces a scatter of offers, a cluster of credit enquiries and no clear explanation of why the figures differ. A better approach is to describe your business accurately once and let someone who knows the lenders’ policies tell you which one is likely to offer what you need.
Questions that sharpen the answer
Before you ask anyone for a figure, answer these for yourself. What exactly is the money for, and what does it cost? How quickly will it pay for itself, if at all? What are your average monthly deposits over the last twelve months? What do you already repay each month to other lenders? Do you or a director own property, and roughly what is owed on it? The clearer these answers, the faster and more accurate the number you get back.
Find your realistic number
Calculators give a starting point; a real assessment gives the answer. Submit a short enquiry with your monthly turnover, existing debts and any property. There is no credit check at enquiry, a specialist calls you back, and there is no spray and pray. Find out how much you can borrow.
Frequently asked questions
Is there a simple rule for unsecured loan size?
Not a single rule. Lenders typically offer a fraction of annual turnover, reduced for existing debts and weak account conduct.
How is the amount set for a property-secured loan?
The lender compares total debt on the property, including the new loan, with its value, then considers property type, location and the repayment plan.
Can I combine unsecured and secured funding?
Yes. Some businesses use a smaller unsecured facility for flexibility and a secured loan for a larger need.
Will a guarantor increase how much I can borrow?
A guarantor with property or a strong file can increase the amount or improve terms, but they take on real risk.
Should I take the maximum offered?
Only if the repayments are comfortable in a slow month. Borrowing less than the maximum often leaves valuable breathing room.
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