Business loans
4
min read
Published at
11 April 2025
Updated
20 October 2026
business-loans

Business loan requirements: What lenders look for before approving you

Put your best foot forward by preparing strong answers to 9 questions a lender might ask you.

Business strategy sketches
Written by
Alex Molloy
Co-Founder & CEO
Key takeaways
  • Lenders want to understand how you'll use the funds, so clearly explain the purpose of the loan and how it will benefit your business.
  • Most lenders assess factors like revenue, industry, time in business and financial history to determine whether you can comfortably repay the loan.
  • Having your financial information, loan purpose and repayment plan prepared can help streamline the application process and give lenders a clearer picture of your business.

Getting a business loan doesn't have to be stressful. Whether you're buying new equipment, expanding your premises, hiring staff or improving cash flow, the right finance can help your business grow.

The key is understanding what lenders look for before you apply.

While every lender has different approval criteria, most ask similar questions to assess your business, repayment capacity and the purpose of the loan.

This guide explains the key questions lenders typically ask and how you can prepare stronger answers before applying.

What do you need to apply for a business loan?

Having your documents organised before you apply can make the process faster and reduce unnecessary delays.

Business information

Keep the following details readily available:

  • Business name and ABN/ACN
  • Details of business owners or directors
  • Recent bank statements
  • Monthly revenue and cash flow
  • Assets and liabilities
  • BAS statements or recent tax returns
  • Business plan or growth strategy (if applicable)
  • Existing loans or liabilities
  • Credit history
  • Financial forecasts (if available)

Personal details

Lenders will usually ask for:

  • Identification (such as a driver's licence)
  • Residential address
  • Recent ATO Notice of Assessment

Asset information (for secured loans)

If you’re applying for a secured loan, you’ll also need details about the asset you're offering as security. This may include ownership information, recent valuations, and insurance documentation.

What will lenders ask about your loan application?

Understanding these questions, and why lenders ask them, can help you prepare a stronger application.

Question 1: What is the purpose of the loan?

Lenders want to understand why you need finance and how it will support your business. They’ll want to know how the funds will be used and whether the loan will help your business generate revenue, improve operations or manage cash flow.

Examples:

  • Purchasing equipment or machinery
  • Expanding premises
  • Hiring staff
  • Managing working capital
  • Purchasing stock
  • Funding a business opportunity

Question 2: How much do you want to borrow?

Lenders will want to understand the amount you’re requesting and why that amount is appropriate for your needs.

Be prepared to explain:

  • How much funding you need
  • How you calculated this amount
  • Whether you need the full amount upfront or ongoing access to funds
  • How the loan will impact your repayments and cash flow

The amount you can borrow will depend on factors like your revenue, financial position, loan purpose and the lender’s criteria. Understanding your borrowing capacity before applying can help you request an amount that aligns with your business needs.

Question 3: How will you repay the loan?

One of the biggest considerations for lenders is whether your business can comfortably manage repayments.

They may assess:

  • Your average monthly revenue
  • Cash flow patterns
  • Profitability
  • Existing financial commitments
  • Future growth plans

Question 4: Tell me about your business

Lenders want to understand your business, industry and experience before making a decision.

They may ask:

  • How long have you been trading?
  • What industry do you operate in?
  • How many employees do you have?
  • What products or services do you offer?
  • Who are your customers?
  • What are your future plans for growth?

Question 5: What is your business revenue and financial position?

Your financial performance helps lenders assess the strength and stability of your business.

They may review:

  • Annual or monthly revenue
  • Profit margins
  • Business expenses
  • Assets and liabilities
  • Recent bank statements
  • BAS statements or tax returns

Question 6: Do you have any existing debts or financial commitments?

Lenders will want to understand your current obligations and whether additional finance is manageable.

This may include:

  • Existing business loans
  • Equipment finance
  • Credit cards
  • Overdrafts
  • ATO debts
  • Other repayment commitments

Question 7: Have you had any previous credit issues?

Lenders may ask about your credit history, including missed repayments, defaults or other financial challenges.

If there are issues in your history, being transparent about what happened and how the situation has changed can help lenders assess your application more accurately.

Also, if your application has previously been declined, understanding what may have influenced the decision can help you address potential issues and strengthen your next application.

Question 8: Do you have security available?

For some loans, lenders may ask whether you can provide an asset as security.

This could include:

  • Property
  • Vehicles
  • Equipment
  • Other business assets

Whether security is required depends on the lender, loan type and amount you’re looking to borrow.

Question 9: How quickly do you need the funds?

The timeframe for accessing finance can affect which lending options are available.

Lenders may ask:

  • When do you need the funds?
  • Is there a deadline involved?
  • Do you have contracts, invoices or quotes supporting the application?

{{first-banner}}

Making your business loan application stronger

Preparing for a business loan application becomes much easier when you know what lenders are looking for. While every lender has different criteria, most will want to understand:

  • Why you need the finance
  • How much you want to borrow
  • How your business generates revenue
  • Whether you can comfortably manage repayments
  • Your existing financial commitments and credit history
  • Whether security is available

Having this information ready before you apply can help speed up the process, reduce delays and give lenders a clearer picture of your business.

If you want an extra hand, Valiant can help you understand what lenders look for, compare your finance options and guide you through the application process from start to finish. 

Depending on your circumstances and lender approval, you could access funding in as little as 24 hours.

Ready to explore your options? Get a quote today (with no impact to your credit score) and we’ll help you find a finance solution suited to your business.

The content in this blog is provided for general information purposes only. It doesn't constitute financial advice and shouldn't be relied upon as such. Always consult a licensed financial advisor, accountant, or legal professional to consider your personal circumstances before making financial decisions.

References
Asset finance
asset-finance
Working capital
working-capital
About the author
Alex Molloy
Co-Founder & CEO

Alex Molloy is CEO and Co-Founder of Valiant, leading the company’s mission to make business finance more accessible and efficient. Since founding Valiant, he’s guided its growth from an Australian startup to a fintech operating across Australia and the US, powering embedded finance for major institutions and platforms.

Last updated on
October 20, 2026

Next step

Loans at the speed of business

Get a quick quoteLearn more

Pause motion