Will you lend to me if I've just bought a business?

Does a bought business count as a new business?

Yes and no — and that’s exactly why you need to explain it.

On paper, you might look brand new. If you set up a fresh company or trust to buy the business, the ABN is new and the business bank account only goes back to settlement. A lender glancing at that sees a start-up.

In reality, you’ve bought something with a history: customers, suppliers, staff, a lease, years of sales. That history is valuable evidence, and a good lender will take it into account — but only if you hand it over and connect the dots.

What evidence bridges the gap?

When you bought the business, you (hopefully) did due diligence. business.gov.au suggests reviewing three to five years of financial records before buying — tax returns, BAS, profit-and-loss statements, balance sheets and sales records — along with licences, leases and supplier contracts. That same file is now your best friend.

Document	What it proves to a lender
Signed sale contract	You own it, what you paid, what was included
Seller’s financials and BAS	The business’s track record before you
Your bank statements since settlement	It’s still trading steadily under you
Lease assignment or new lease	You can keep operating from the premises
PPSR search results from the purchase	What security interests existed and were cleared
Your background	Why you’re equipped to run it

A PPSR search (the Personal Property Securities Register, run by AFSA) shows registered security interests over business assets. If you searched it when buying, keep the result — it helps show the assets came to you clear.

Which loan options fit a recent purchase?

It depends on how much you need and whether property is available.

Property-secured business loans from $20,000 to $5,000,000 — first mortgages, second mortgages and caveat loans over residential or commercial property — are the most common path in the early months. The lender looks at equity, purpose and how you’ll repay, so your short ownership period matters less.

Unsecured, cash-flow and line-of-credit options (typically $5,000 to $500,000) are sized on turnover and bank statements. Right after settlement, your own statements are short, so these can be modest to begin with. As your months of ownership build up — see our six-month page — they get more realistic.

Just taken the keys and already need working capital? Tell us about it in 60 seconds — no credit check to enquire, and a person will call you.

What do new owners usually need money for?

Common reasons we hear from people who’ve just bought:

• Working capital because the purchase ate the cash buffer;
• Stock — the seller ran it down before handover;
• Equipment that turned out to be older than it looked;
• A refit to put your stamp on the place;
• Paying out a vendor where part of the price was deferred;
• Hiring to replace the previous owner’s hours.

All of these are business purposes. Personal spending isn’t.

An illustrative example

This example is invented for illustration.

A couple buy a suburban bakery that’s traded for eleven years. They set up a new company to own it, so the ABN is two months old. The ovens need replacing sooner than expected, and they need $75,000.

• They give the lender the sale contract, the previous owner’s two years of financials and their own two months of statements showing sales holding steady.
• They own their home, which has a mortgage but also solid equity. A second mortgage behind their existing home loan funds the ovens.
• The plan is to refinance into a longer-term facility once they have a full year of their own figures.

What makes lenders nervous with a recent purchase?

Be ready to talk about these:

• A big drop in sales after handover. Some dip is normal; a large one needs an explanation (our revenue dropped page covers this).
• Key staff or customers leaving. If the business relied on the seller’s personal relationships, how are you keeping them?
• A short lease. If the lease has little time left, how secure is the location?
• No industry experience. It’s not fatal, but tell the lender how you’re covering the gap.

Our guide on explaining your situation to a lender has a simple one-page format that works well here.

Should I have arranged the funding before I bought?

In a perfect world, yes — many buyers line up working capital alongside the purchase price. But plenty of people discover the need after settlement, when the reality of running the place sets in. That’s normal, and it’s still very workable.

What to think about if you’re reading this before you buy:

• Budget for the first three to six months, not just the purchase price. Stock, wages, repairs and the lag before your own customers pay all need cash.
• Ask the seller for their records early. business.gov.au suggests reviewing several years of financial records during due diligence — those same records will help you borrow later.
• Check what’s owed on the assets. A PPSR search shows security interests you want cleared at settlement.
• Plan your structure. If you set up a new company to buy, expect a new ABN — see what a brand-new ABN means.
• Think about security. If property equity will be needed, talk to anyone whose property is involved well before settlement.

And if you’ve already bought and trade has dipped during handover, our revenue dropped page explains how a lender reads it.

Let’s look at your purchase properly

Buying a business is a big step, and the first year can be tight on cash. If you need funding to settle in, grow or fix something the seller didn’t mention, let’s talk about it.

You won’t face a credit check just for asking, and your details don’t get pushed out to a queue of lenders — a real person works on it with you. When you fill in the form, tell us accurately when you bought, what you need and whether there’s property available, so we can match you properly from the first conversation. Enquire here.