Sole Trader Loans - Rates from 6.59%

Sole trader lending is personal lending with a business purpose. Every lender assesses five things, weighted differently depending on the product.

1. ABN age and trading history. Most mainstream lenders require 12 to 24 months of ABN registration. Non-bank lenders may consider ABNs as young as 6 months. For equipment finance specifically, specialist lenders will look at ABNs from 3 months if other factors are strong.

2. Revenue and bank statement conduct. Lenders review 3 to 6 months of business bank statements. They want to see consistent monthly deposits, ideally $5,000 to $10,000+ per month depending on the loan amount. Steady regular deposits are a stronger signal than irregular lump sums. Dishonour fees, persistent low balances, and gambling transactions are red flags.

3. Personal credit score. Your personal Equifax score drives your rate. Above 600 unlocks the best pricing. Between 500 and 600 narrows your panel but still has options. Below 500 limits you to specialist lenders at 15%+ per annum. Unlike company structures, there's no separation between you and the business.

4. Existing debt and commitments. Lenders calculate your debt service ratio. Personal mortgages, car loans, credit cards, HECS, and any other obligations all count. The lower your existing commitments relative to your income, the more you can borrow.

5. Loan purpose and security. Secured lending (equipment, vehicles) is easier to access because the lender has an asset to fall back on. Unsecured business loans require stronger financials and credit because there's no collateral. For a detailed walkthrough of the approval process, see our sole trader loan guide.

Major banks (CommBank, Westpac, NAB, ANZ) offer sole trader business loans, but their criteria are strict: typically 2+ years of ABN history, minimum annual revenue of $60,000 to $100,000, and clean credit. The approval rate for sole traders applying directly to a major bank is roughly 35%.

Non-bank lenders fill the gap. They accept shorter ABN histories (6 to 12 months), lower revenue thresholds ($5,000 per month), and can work with impaired credit. The trade-off is rates 1-3% higher than bank pricing. On a $50,000 loan over 3 years, the rate premium costs $750 to $2,250 in additional interest.

Specialist and alternative lenders go further: revenue-based lending that looks at your bank deposits rather than financial statements, and fintech platforms that use real-time accounting data (Xero, MYOB) alongside bank feeds. Some can approve and fund within hours.

Through Emu Money, one application reaches all three tiers. You don't need to know which category you fall into. We match your profile to the lenders most likely to approve and offer the best available rate for your situation.

For a full breakdown of what each lender type requires, see our guide on how to get a business loan as a sole trader.

Interest paid on any business loan is tax-deductible as a business expense. As a sole trader, this flows directly through your personal tax return, reducing your taxable income.

On a $50,000 business loan at 9% over 3 years, total interest is roughly $7,200. At the 32.5% marginal tax rate (income $45,001 to $120,000), that saves $2,340 in tax.

For equipment and vehicle finance, additional deductions apply:

GST credits. If you're GST-registered (turnover above $75,000), you can claim the GST component of the purchase price on your next BAS. On a $55,000 vehicle, that's $5,000 back within weeks. For passenger vehicles, the credit is capped at $6,334 (2025-26 car depreciation limit).

Depreciation. You can depreciate the asset over its effective life. Small businesses with turnover under $10 million can use the instant asset write-off for assets under $20,000 (now permanent from 1 July 2026). Assets over $20,000 go into the small business pool at 15% in the first year, 30% each year after.

Vehicle deductions. Two methods: the logbook method (claim actual business use percentage of all running costs) or cents per kilometre (85 cents/km for up to 5,000 business km). The logbook method almost always produces a larger deduction for sole traders doing significant business travel.

The ATO's personal services income (PSI) rules apply if more than 80% of your income comes from a single client. PSI rules don't prevent deductions on finance, but they limit some other business deductions. Consult your accountant for advice specific to your situation.

Starting out doesn't mean you can't access finance. Your options depend on how long you've been trading and what you're buying.

0 to 3 months ABN: Options are limited but not zero. Equipment finance through specialist lenders is possible if you have strong personal credit (600+), relevant industry experience, and are buying from a dealer. A deposit of 10-20% strengthens the application significantly. Government programs like Self-Employment Assistance provide an allowance for up to 39 weeks while you establish your business.

3 to 12 months ABN: The panel widens. Equipment and vehicle finance become accessible through multiple non-bank lenders. Unsecured business loans are possible but typically require 6+ months of bank statements showing consistent deposits of at least $5,000 to $6,000 per month.

12 to 24 months ABN: Most non-bank lenders and some banks will consider your application. Your first 12 months of repayment history on an earlier facility becomes a powerful asset for refinancing or additional borrowing at a better rate.

24+ months ABN: Full panel access, including major banks. If you've maintained clean credit and consistent revenue, you're competing on the same terms as established businesses.

Startup rates are typically 2-4% higher than established business rates. Many sole traders take their first facility at the higher rate, prove their repayment record, then refinance to a better deal 12 to 24 months later. For the full start-up pathway, see our guide to start up loans for sole traders.

Sole traders are the most common users of low doc finance. If your tax returns are 6 to 12 months behind your current activity (as many are), you can apply with bank statements instead of full financial statements.

Most low doc lenders require:

• 3 to 6 months of business bank statements
• Valid ABN (typically 6+ months registered)
• Photo ID (driver's licence or passport)
• A quote or invoice for the asset (if equipment/vehicle finance)

Lenders assess your application based on bank statement conduct rather than formal financials. They look for consistent monthly deposits, stable average balances, and no patterns of overdrawing or dishonour fees.

Low doc rates are typically 1-3% higher than full doc rates. On a $50,000 loan over 3 years, that gap costs $750 to $2,250 in additional interest. If your financials will be ready within a few months, it may be worth waiting. If the purchase is time-sensitive, the rate premium is often justified by getting the asset working and generating revenue sooner.

88.2% of business finance in Australia is on variable rates (ABS, January 2026). This means most low doc products adjust with market rates rather than locking in the premium permanently.

Secured sole trader loans are backed by an asset (the equipment or vehicle you're buying, or in some cases, property). Unsecured loans have no collateral. The choice affects your rate, approval odds, and what you can borrow.

On a $50,000 loan, a secured rate of 9% versus an unsecured rate of 14% costs an extra $2,500 per year in interest. Over 3 years, that's $7,500 in additional cost for the unsecured option.

Choose secured when you're buying a specific asset (vehicle, equipment, machinery). The asset secures the loan, rates are lower, approval is easier, and you get tax benefits on the asset. Equipment finance is often the first finance product sole traders access because the asset reduces the lender's risk.

Choose unsecured when you need working capital (stock, marketing, wages cover), when the purchase doesn't qualify as a financeable asset, or when speed matters more than rate (some unsecured lenders fund same-day). Unsecured requires stronger financials and credit because there's no fallback for the lender.

For more on the trade-offs across all your finance options, see our guide to sole trader finance.

Applying to one bank and stopping. A single application gives you one answer from one credit policy. If that bank declines or offers a high rate, you might assume finance isn't available. Through a broker, the same application reaches 50+ lenders with different appetites and criteria.

Mixing personal and business accounts. Lenders review your business bank statements. If personal spending is mixed in, it's harder for them to assess your business revenue and the assessment takes longer. A dedicated business account (even for a sole trader) makes the application cleaner.

Not checking your credit report first. A surprise default or judgement on your personal credit file can derail an application. Check your Equifax report before applying. If there are issues, a specialist lender can still work with you, but you need to know in advance so the right lender is approached first.

Over-borrowing on unsecured. The ease of unsecured lending (minimal documentation, fast approval) can tempt sole traders to borrow more than their cash flow supports. A good test: can you comfortably make the monthly repayment if your revenue drops 20% for two months?

Ignoring the structure on vehicle finance. A chattel mortgage at 7.5% with GST credits and depreciation deductions can cost less after tax than a personal car loan at 6.5%. The headline rate isn't the full picture when business use is above 50%.