Our verdict Yes, with context
The short answer
Yes, with context. Relying on one major customer is common for subcontractors, suppliers and service businesses, and lenders see it all the time. What they want to know is how secure that relationship is — a contract, a long history, reliable payment — and what happens if it ends. Clear evidence of the relationship, plus property security for larger amounts, usually keeps a yes on the table.
Key points
- Customer concentration is a risk lenders weigh, not a reason to decline on its own.
- A written contract, a long track record and reliable payment are what reassure them.
- Showing a plan to diversify — even slowly — helps.
- If the loan helps you deliver more for that customer, say so; it links borrowing to income.
Why does one big customer make lenders ask questions?
Because a lender’s job is to imagine what could go wrong — and with one big customer, the obvious “what if” is: what if they leave?
If eighty cents of every dollar you earn comes from one builder, one retailer, one hospital or one government department, the business’s ability to repay is tied to that relationship. That’s not a criticism. Subcontractors, specialist suppliers, labour hire firms, cleaners, IT contractors and couriers often work this way, and many of them are very good businesses.
The lender just needs to understand how solid the relationship is.
What reassures a lender?
| Question they’ll ask | What helps |
|---|---|
| How long have you worked with them? | Years of steady deposits from the same payer |
| Is there a contract? | A written agreement with a term, volumes or pricing |
| When does it end? | A term that runs well beyond the loan’s early months |
| Do they pay reliably? | Regular payments on agreed terms in your statements |
| What if they leave? | Other customers, a pipeline, or security to fall back on |
| Is the relationship growing? | New purchase orders, extra sites, more volume |
A long, reliable, contracted relationship can actually be a strength. A one-year-old handshake arrangement with no paperwork is harder.
Which loan options suit a concentrated business?
Unsecured, cash-flow and line-of-credit options (typically $5,000 to $500,000) are sized on turnover and bank statements. Many unsecured lenders will work with concentrated income if the customer is reliable and the relationship is documented — though some will size a more cautious limit to allow for the risk. A line of credit can be useful if your main customer pays on long terms.
Property-secured business loans ($20,000 to $5,000,000) through first mortgages, second mortgages or caveats over residential or commercial property. Because these lean on equity and a repayment plan, customer concentration matters less. They suit bigger amounts, especially when you’re investing to grow with that same customer.
Tied to one big client and need funding? Tell us about the relationship — no credit check to enquire.
How should I present the relationship?
- Name the type of customer (not necessarily who they are) — “a tier-one builder”, “a state health service”, “a national retailer”.
- Show the history — how long you’ve worked together and how the work has grown.
- Provide the contract, or purchase orders and correspondence if there’s no formal agreement.
- Explain payment terms and how reliably they’re met.
- Mention your other customers, even if they’re smaller, and any plan to add more.
Our guide on explaining your situation to a lender covers how to lay this out simply.
An illustrative example
This is an illustrative example only.
A steel fabrication business earns most of its income from one commercial builder it has worked with for six years. The builder has just won a large project and wants the fabricator to double its output, which means a second CNC machine and three more staff — around $260,000.
- Bank statements show six years of reliable payments from the builder, on 30-day terms.
- The builder provides a letter confirming the upcoming work.
- The owner’s factory is held in a related entity with good equity. A loan secured over it funds the machine and the first months of extra wages.
- The owner’s plan includes quoting two other builders over the next year to spread the risk.
What if I’ve just lost my big customer?
That’s a different conversation — and an important one. If the main customer has gone, a lender will focus on what replaces the income and how quickly. Our page on revenue dropping talks through how lenders see that, and our guide to early warning signs looks at concentration as a risk worth planning for before it bites.
How can I reduce my reliance over time?
A lender won’t expect you to transform your customer base overnight, but a sensible plan to diversify strengthens any application — and the business itself. Practical steps owners take:
- Quote for one or two similar customers each quarter, even if you win only some.
- Offer a smaller, repeatable service to a different customer type.
- Use your main customer as a reference — a strong relationship is a great calling card.
- Keep capacity in reserve so you can say yes when a new customer appears.
- Watch payment terms — negotiating shorter terms with new customers improves cash flow.
Even a modest shift, from one customer providing nearly all your income to one providing most of it with several others behind, changes how a lender reads the risk.
If your main customer pays on long terms and cash flow is tight while you wait, a line of credit can help bridge the gap. Our no property page explains how unsecured facilities are sized. If you’re growing to take on more work for that customer, paying cash or financing equipment might help you decide how to fund the gear.
Let’s talk about your key relationship
One strong customer can be the backbone of a great business. The right funding can help you serve them better — and build the resilience to add more customers over time.
There’s no credit check when you first enquire, and your details won’t be handed out to a crowd of lenders. A real person reads your enquiry and calls you. Please be accurate on the form about how much of your income comes from your main customer and whether there’s a contract — that detail is what lets us match you to a lender who’s comfortable with it. Start here.
Frequently asked questions
What counts as 'relying on one customer'?
There's no single cut-off, but when one client accounts for most of your deposits, a lender will notice and ask about it. The more concentrated the income, the more they'll want to understand the relationship.
Does a written contract help?
A lot. A contract with a set term, volumes or rates shows the income is committed. Even a long email trail and years of purchase orders help if there's no formal contract.
What if my main customer is a government agency?
Government customers are generally seen as reliable payers, which helps. Lenders will still look at the contract term and what happens when it ends or is re-tendered.
Can I borrow to take on more work from that customer?
Yes. Funding equipment, staff or stock to deliver a bigger contract is a clear business purpose, and linking the loan to the contract makes the case easier to follow.
My main customer pays slowly. Does that matter?
It affects your cash flow, which a lender will see in your statements. Explain the payment terms. A line of credit can suit businesses waiting on a big customer's payment cycle.