Applying for finance

Applications for finance should provide a potential lender with sufficient information to adequately assess the applicant and the viability of the business venture.

Applying for finance? The following key points for preparing an application for finance will improve your chances of success.

The applicant

The lender will assess the applicant's strengths, weaknesses and past business performance as relevant to the project. The lender will have to be confident that the applicant has the skills and ability to ensure the success of the project.

The business/project

Describe the business or project in some detail. Make sure that the lender understands precisely the nature of the business and the reasons for the loan. Information from IBISWorld reports can be useful in providing a broad overview of the industry. The overview should include forward projections, comments about barriers to entry, and current industry conditions and opportunities. (IBISWorld is a database of industry and enterprise information. It is available in read only format in the Small Business Development Corporation (SBDC) Business Information Centre and through most Business Local providers).

The feasibility/marketing strategy

This probably is the most difficult section to complete. Provide quality data, because unsubstantiated estimates do not inspire confidence in a lender.

The financials

If appropriate, include historical information relative to the past performance of your business, including income statements and balance sheets. For new businesses, show all forward estimates including cashflow forecasts, budgets and a breakeven analysis. The projections are often best presented on a three scenario basis, best case, worst case, and something in between. The financial information must demonstrate the business will be able to generate sufficient funds to repay the loan and the interest.

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The loan and repayment details

Specify precisely the amount required to achieve the objectives of the project, and how the loan, plus interest, will be repaid. The type and mix of finance should be specified, for example, an overdraft, a fully drawn advance or a fixed term loan. If you intend to operate from rented premises, advise the lender of the term of the lease as this will impact on the term of the loan.

Do not underestimate the amount you want to borrow. Lenders lose confidence when you have to return for additional funding to cover costs underestimated in the original financial forecasts.


Finally, provide full details of available security, including any encumbrances currently attached to the title. Provide details of any life, sickness and accident and disability insurance cover for any key people.

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Related Information

Top Tips

  1. This is an SBDC small business brief – a summary of essential information about a popular business topic.

    There is a series of small business briefs and also step-by-step business guides that make it easier to deal with the complexity of running a small business.

  2. Need advice about business financial matters? Call 13 12 49 or email us to speak with a specialist small business adviser.

  3. Visit us and make the most of our one-stop service for all the business information you need for the right start, as well as IBISWorld – an excellent industry and market research resource that covers more than 500 industries in Australia’s economy

  4. From free Business Basics workshops to more specialised workshops and one-to-one advisory sessions, we can provide support – directly and through our partner organisations.

  5. Take charge of your finances with the help of our step-by-step workshop Understanding Your Business Financials