How Much Can Your Business Actually Borrow?
Before you approach a lender, you need to know the number — not a vague range, not a polite estimate. This calculator models capacity across the two methods Australian lenders actually use: the bank DSCR method and the non-bank revenue method.
Who it's for
Business owners, sole traders, partnerships, companies and trusts evaluating a loan for working capital, equipment, expansion, property or debt consolidation — and accountants or brokers running a quick capacity check.
What it calculates
Maximum borrowing capacity under both DSCR and revenue methods, the recommended (lower) figure with the binding constraint explained, estimated monthly repayment, your DSCR and the headroom above the 1.25× minimum.
Why it matters
Applying with unrealistic expectations wastes time, generates credit enquiries and can damage your credit file. Knowing your capacity before you apply lets you approach the right lenders with the right numbers — and surfaces ATO debt risk before approval stage.
Business Borrowing Power Calculator
Models both the bank-style DSCR method and the non-bank revenue method side by side.
Business revenue & profit
Business profile
Loan parameters
Default 8.50% — assessed at +2% buffer (10.50%).
Find lenders who match your borrowing capacity.
LoanGorilla compares business loans from 40+ Australian lenders — including non-bank lenders who assess on revenue rather than profit. See who will lend to your business without affecting your credit score.
How this calculator works
Business borrowing power is assessed very differently from a personal home loan. There is no single universal formula — Australian lenders combine methods depending on risk appetite, trading history and security. This calculator models the two most widely used approaches simultaneously.
The DSCR method
Used by the major banks. Net Operating Income (revenue minus operating expenses, before interest and tax) is divided by Total Annual Debt Service (existing repayments plus the proposed new loan). Most banks require a DSCR of at least 1.25×. Working backwards: maximum allowable annual debt service equals NOI ÷ 1.25. The calculator capitalises that figure over your selected term at the assessed rate (entered rate plus a 2% serviceability buffer) to arrive at a maximum loan amount.
The revenue method
Used by fintech and non-bank lenders, particularly for businesses with strong cash flow but thin margins. Lending is capped at roughly 10–20% of annual revenue (or 1–2× monthly revenue for short-term facilities). Bank statement analysis replaces tax returns. For established businesses (2+ years) this calculator uses 20% of revenue (30% if secured); for under-two-year businesses 10% (15% if secured).
Other modifiers applied
- Trading history: under 2 years cuts DSCR capacity (40–60% factor) and shifts the lender mix toward non-banks.
- Industry risk: hospitality, construction and retail face tighter practical limits than professional services or healthcare.
- Security: unsecured borrowing capacity is typically 30–50% lower than secured equivalents — reflected in both rate defaults and the revenue cap.
- ATO debt: any outstanding ATO debt (GST, PAYG, super) is flagged as a material issue requiring a payment plan or full clearance.
- Rate buffer: a 2% p.a. serviceability buffer is applied above the entered rate for assessment.
How to interpret your results
- DSCR is the binding constraint. Profit relative to existing debt is the limit. Banks are the most relevant pathway. Increasing net profit or reducing existing debt is the fastest lever.
- Revenue is the binding constraint. Profit is strong relative to revenue, but the revenue base is too small for non-bank caps. Common for high-margin service businesses. Growing revenue — not just margin — is the lever.
- Recommended figure is conservative by design. It uses the lower of the two methods and applies a serviceability buffer.
- DSCR buffer = your safety margin. Well above 1.25× (e.g. 1.60×) signals strong serviceability. Just above 1.25× is tight — minor revenue drops can push you below.
- Lender type indicator is directional, not deterministic. A non-bank flag means bank approval is unlikely on these inputs — non-bank lenders can still offer competitive finance.
- ATO debt flag is serious. Address proactively — most lenders will identify ATO debt regardless of disclosure. A maintained payment plan is materially better than undisclosed debt.
How to strengthen your borrowing position
- Reduce existing debt obligations before applying — even retiring a small lease or overdraft shifts your DSCR meaningfully.
- Maximise documented net profit — speak to your accountant about the trade-off between tax minimisation and documented serviceability, and identify add-backs your lender will accept.
- Sort out ATO debt — a formal, maintained payment plan is significantly better than undisclosed debt.
- Build trading history — at the 24-month mark a much wider lender pool opens at materially better rates.
- Offer security where available — increases capacity 30–50% and reduces rates.
- Grow consistent, documented revenue — irregular or undocumented income is treated as if it does not exist.
Example calculations
Four very different business profiles produce very different outcomes — and the binding constraint shifts depending on profit structure, trading history and industry.
| Scenario | Revenue | Net Profit | Existing Debt | DSCR Method | Revenue Method | Recommended |
|---|---|---|---|---|---|---|
| Sole trader, 3yrs trading, professional services, unsecured | $280,000 | $95,000 | $0 | $304,000 | $56,000 | $56,000 |
| Company, 5yrs trading, retail, unsecured | $850,000 | $110,000 | $24,000/yr | $272,000 | $170,000 | $170,000 |
| Company, 4yrs trading, construction, secured (property) | $1,400,000 | $240,000 | $60,000/yr | $672,000 | $280,000 | $280,000 |
| Company, 14 months trading, hospitality, unsecured | $420,000 | $38,000 | $18,000/yr | $48,000 | $84,000 | $48,000 |
Assumptions: 8.50% p.a. unsecured / 7.50% p.a. secured · 3-year unsecured / 5-year secured · DSCR minimum 1.25× · Revenue method 20% (10% under 2yrs) · May 2026.
Calculator assumptions
This calculator is an educational tool. Figures are estimates only and do not constitute a credit offer, pre-approval or formal assessment. Actual borrowing capacity will vary between lenders based on your full credit profile, the quality of financial documentation, current lender appetite, internal credit policies and factors specific to your business not captured here. The DSCR method applies a 1.25× minimum threshold (some lenders apply up to 1.5× for certain industries; others accept lower for strongly secured or short-term facilities). Revenue method applies 20% of revenue for established businesses and 10% for under two years, consistent with common non-bank criteria as at May 2026. Default rates: 8.50% p.a. unsecured / 7.50% p.a. secured, with a 2% p.a. serviceability buffer applied for assessment. No credit check is performed. LoanGorilla is a credit marketplace, not a lender. Last updated May 2026.