Why Business Finance Matters More Than Ever
Access to finance is often the key to growing a business and turning small business dreams into reality. Whether it’s purchasing new equipment, expanding operations, or hiring staff, a loan can provide the capital needed to move forward.
But in today’s tougher economic climate, getting approved for business finance is no guarantee. To improve your odds, Swoop Funding outlines five actionable steps any small-to-medium enterprise (SME) can take to become more attractive to lenders.
1. Lay Down a Proven Track Record
Lenders like confidence—and that comes from evidence of business performance.
From the moment you start trading, be sure to:
- Register for GST
- Get your Australian Business Number (ABN) in place
Most lenders want to see at least two years of trading history. It shows you’ve survived the early stage of business life and can back up your loan application with a credible track record.
2. Stay Out of Tax Debt
Debts with the Australian Tax Office (ATO) are seen as a major red flag by lenders.
Being behind on tax obligations sends a clear message about financial management—and it’s not a good one.
Staying ahead of your tax responsibilities shows lenders you are responsible, organised, and trustworthy—the kind of borrower they want.
3. Separate Business and Personal Finance
Blurring the lines between personal and business finance can create confusion and risk.
Swoop Funding recommends:
- Setting up dedicated business accounts
- Avoiding the use of personal credit cards for business
- Paying yourself a consistent salary
This approach isn’t just smart for tax purposes—it helps build transparency and trust with lenders, too.
4. Keep an Open Mind on Property
Yes, owning property can be helpful—collateral can improve your loan terms—but it’s not essential.
Instead, focus on:
- Strengthening your business’s financial fundamentals
- Searching for unsecured loans or credit lines tailored to businesses that don’t own property
Not every lender requires security—especially if you can show sound business performance.
5. Maintain Clean Bank Statements
Lenders will scrutinise your bank activity, so make sure your statements reflect strong financial management.
Aim for:
- Positive cash flow
- Regular, predictable income
- No dishonours or overdrafts
- No erratic or irresponsible spending
Clean bank statements tell the story of a well-managed business—exactly what lenders want to see.
