How long do I need to be trading to get a business loan?

New owners ask Mr this with a mix of hope and dread: “How long until a lender takes me seriously?” The honest answer is that it depends on what you’re offering a lender to rely on. Trading history is one thing they can rely on. Property is another. You need at least one of the two.

Why does trading history matter so much?

An unsecured lender has nothing to fall back on except the business’s ability to keep earning. The only proof of that is history:

• regular deposits in your business bank account;
• consistent turnover across good and quiet weeks;
• costs and tax being paid on time;
• no dishonours or stretched overdraft.

With two months of statements there’s simply not enough to judge. With twelve, there’s a clear pattern. That’s why unsecured lending usually follows a track record of six months or more, with larger amounts needing longer.

How does property change things?

Property-secured lending, from $20,000 to $5,000,000, looks first at equity and the plan to repay. So a business that’s very new — or one that’s restructured, or whose accounts are behind — can sometimes borrow if property is available. The lender still wants to understand the business and its purpose, but the property carries much of the weight. See can I borrow against my house for my business?

What’s realistic at each stage?

Time trading	What’s usually realistic
Not started yet	Property-secured, or a supporter giving security; bank start-up lending with a strong plan
Under six months	Property-secured; some small unsecured options if deposits are strong and steady
Six to twelve months	Unsecured options open up, typically for smaller amounts; property-secured for larger
One to two years	Wider unsecured options, typically $5,000 to $500,000; property-secured as needed
Two years plus, returns filed	The full range, including refinancing to banks

These are broad patterns, not rules — credit history, industry and the amount all shift the picture.

Does experience count?

It can. Lenders read people as well as numbers. If you were a chef for ten years before opening your own café in Wānaka, or a builder’s foreman before starting your own firm, say so. It doesn’t replace trading history, but it changes how a lender sees the risk in your first year.

If you’ve bought an existing business, its history before you took over can help too — see can I borrow to buy a business?

Curious where you sit right now? The funding readiness check gives a quick read, or ask a specialist directly — there’s no credit check to ask.

How do I build a lendable history fast?

Mr’s first-year checklist:

1. One business account for everything. All takings in, all costs out.
2. No dishonours. Keep a small buffer and time direct debits after your usual deposit days.
3. Register for GST when required (turnover of $60,000 or more over 12 months) and file every return on time.
4. Use accounting software from day one, so management accounts are a click away.
5. Pay yourself regularly rather than raiding the account at random.
6. Keep personal credit clean, because in the early years lenders lean on the owner’s record.
7. Set aside tax — the second-year provisional tax bill catches many new owners. Read the second-year provisional tax shock.

What if I need money before I have the history?

Options to discuss:

• Property security — yours, or a family member’s or trust’s with their informed agreement.
• Start smaller — a modest facility you manage well becomes the reference for the next.
• Equipment-specific finance for assets that hold value, where the asset itself is security.

Avoid stacking several small high-cost facilities to get by. It’s easy to do and hard to unwind — our page on combining business debts shows why.

An illustrative example: three owners at three stages

These cases are invented to show how the picture changes.

Month 3 — a mobile dog groomer in Hamilton. Takings are growing but only three months of statements exist. Unsecured lenders don’t have enough to work with. Her options: a small equipment-specific facility for the van fit-out, family property security with informed agreement, or waiting a few months while keeping the business account spotless.

Month 10 — a café in Palmerston North. Ten months of daily card deposits show a clear pattern, including a quieter summer when students leave. A modest unsecured facility is now realistic, sized cautiously. For anything larger, the owners’ home could provide security.

Year 3 — a plumbing firm in Nelson. Three years of statements, GST returns and two sets of financial statements. Unsecured options open up across the typical range, property-secured lending is available for bigger needs, and a bank may be interested too. The question has changed from “can we borrow?” to “which option is cheapest and most flexible?”

Same country, same lenders — the difference is time and a tidy record.

Mistakes that reset the clock

Some habits make lenders treat an established business as if it were new:

• Running takings through several accounts, so no single statement tells the story.
• Changing structure without explaining it, so history appears to start again.
• Long gaps in GST filing, which make turnover hard to verify.
• Frequent dishonours, which suggest the business can’t carry more commitments.
• Mixing personal spending into the business account, which muddies the picture.

Fix these and your history counts for its full length.

Ask Mr where you stand

Tell us how long you’ve been trading, roughly what comes in each month and whether property is available. There’s no credit check to ask, your enquiry isn’t shared with a crowd of lenders, and a real person will tell you honestly what’s possible now and what to build towards.

Please give your real start date and monthly turnover on the form — rounding up helps nobody, and accurate numbers get you to the right option sooner. See if your business qualifies.