Business loans for sole traders in Australia: a simple guide
Last updated: December 2025
Written by Michael Pajar, Director.
If you are a sole trader, money stress can hit even when work is good. One slow week, a big bill, or a late-paying client can throw everything off.
And when you’re the only one running the business, it can feel like, “Is this normal… or am I behind?”
You’re not behind. This is common.
You might be thinking: “Can I get a business loan as a sole trader?”
In many cases, yes, it can be possible. This page explains how it usually works, in plain English.
This guide is general information only. It does not cover full eligibility rules, full document checklists, or every loan option. If you want a full overview of business loan options, go here: business loans overview
Quick promise from me
I won’t hype this up. I won’t promise outcomes. I’ll just explain what usually matters, so you can make a calm choice.
What is a “sole trader loan”?
Most of the time, there is no special product called a “sole trader loan”. It is usually a business loan that a sole trader can apply for.
The big difference is simple:
As a sole trader, your business and personal side can be closely linked. So lenders often look at both.
Why sole traders look at business loans
Most sole traders look at finance when they need to:
cover a cash flow gap
pay supplier bills on time
pay BAS or tax without falling behind
buy stock or materials for a job
take on a bigger job
build a small buffer for slower weeks
A loan is not “good” or “bad”. It is a tool. The goal is to use it in a safe way.
The biggest mistake I see
The biggest mistake is borrowing first… then hoping it works out later.
A lot of sole traders do this when they feel rushed. So if that’s you, you’re not alone.
A safer way is:
be clear what the money is for
be clear how you will repay it
make sure repayments fit your real cash flow
keep a buffer if you can
A loan should reduce stress, not add it.
What lenders usually look at (simple version)
Every lender is different. But most look at the same big things.
1 - Business bank statements
For business loans, most lenders will want to see at least 6 months of business bank statements. This helps them see real trading and cash flow.
2 - Money coming in
They want to see income coming in over time. It does not need to be perfect. But steady trading helps.
3 - How your account runs day to day
They may look for things like:
payments that bounce
lots of days in the negative
constant cash shortages
messy patterns that are hard to explain
One issue might be okay. A pattern is what can hurt.
4 - Credit history
For sole traders, personal credit can matter too. That is because the business and the person can be closely linked.
If your credit is not great, it does not always mean “no”. But it can change what options make sense.
5 - Time in business
Longer trading history can help. It shows the business has survived real life ups and downs.
If you’re worried about being rejected
A lot of sole traders feel nervous about applying. They think: “What if I get knocked back?”
That feeling makes sense. Time is tight, and you don’t want to waste it.
The safest move is to start with clarity first:
What does your recent trading show?
And what options usually fit your situation?
Easy wins before you apply
You do not need to be perfect. But these simple steps can help:
use one main business account for trading
keep business income and spending clear
reduce last-minute transfers between accounts
keep invoices and payments organised
know your break-even number (what you need each week/month)
If you do one thing, do this. Look at the last 3–6 months and ask: “Could my business repay a set amount without stress?”
Common questions (answered simply)
Can a sole trader get a business loan in Australia?
Yes, it can be possible. It usually depends on cash flow, bank statements, and credit history.
Do sole traders need bank statements?
In most cases, yes. Bank statements are one of the main ways lenders check real trading.
What if my credit history is not perfect?
Finance may still be possible. The safest approach is to be honest early, so you don’t waste time on the wrong path.
Is there one “best” loan for all sole traders?
No. The best fit depends on the problem you are trying to solve.
If you want to learn more about other types of loans, check out our pages at Unsecured Business Loans or Working Capital Loans.
A safe way to think about borrowing
Before you borrow, ask:
what exact problem am I fixing?
what happens if next month is slower?
do I have a backup plan?
is there a cheaper way to solve this?
will this make the business calmer, or more stressed?
If you feel unsure, that is normal. Money choices can feel heavy when you are doing it alone.
Calm next step (no pressure)
If you want, you can do a quick check and I’ll help you understand where you stand.
It’s a simple first step, and you don’t need to commit.
Check Eligibility (30 sec)
If you want the full overview first, start here: Business Loans Overview
Disclaimer
This article is general information only. It does not consider your objectives, financial situation, or business needs. It is not legal, tax, or financial advice. Business use only.
