The short version
- Yes, a new business can get a line of credit, but rarely from a bank.
- Major banks generally want one to two years or more of trading before approving a business line of credit.
- Non-bank lenders offer lines of credit from around six months of trading with $10,000+ monthly revenue, faster but at a higher rate.
- Under six months of trading, a revolving facility is very hard to get. A business credit card or invoice finance is usually the realistic bridge.
- The cost that catches new businesses out isn't the interest rate. It's the fee charged on the limit you haven't drawn.
Can a new business get a line of credit? Yes, but the honest answer is that it depends almost entirely on who you ask and how long you've been trading. Walk into a bank six months in and the answer is usually no. Approach the right non-bank lender with the same six months and steady revenue, and a modest revolving facility is realistic.
This guide explains why banks treat new businesses the way they do, what a new business can actually get at six, twelve and twenty-four months of trading, what a new-business line of credit really costs, and how to build toward the cheaper bank facility over time.
Why banks say no to new businesses
Banks price on low risk, and a new business is, by definition, an unknown. Most major banks want to see one to two years of trading, and often longer, before they'll extend a revolving facility like a business line of credit or an overdraft. It isn't personal, and it isn't a judgement on your business specifically. It's a policy floor applied to everyone.
The logic is that a revolving facility is open-ended. Unlike a term loan with a fixed repayment schedule, a line of credit can be drawn, repaid and redrawn indefinitely, so the bank is betting on your ability to manage it for years, not months. With only a short history to look at, they'd rather wait.
The catch is timing. New businesses are exactly the ones most likely to hit a cash-flow gap, and they're the ones least able to get the standard tool for smoothing it. That gap between need and access is the whole reason non-bank lenders exist in this space.
What a new business can actually get
Your realistic options change sharply with every few months of trading history. This table is the part worth keeping.
| Time trading | Line of credit? | Realistic alternatives |
|---|---|---|
| Under 6 months | Very unlikely | Business credit card, invoice finance (if invoicing B2B), equipment finance secured on the asset |
| 6 to 12 months | Yes, from non-bank lenders, smaller limits | Non-bank line of credit, business overdraft (rarely), invoice finance |
| 12 to 24 months | Yes, larger non-bank limits | Non-bank line of credit, possibly a bank overdraft if revenue is strong |
| 24 months+ | Yes, bank facilities become realistic | Bank line of credit or overdraft at the best pricing |
A few things worth drawing out of that:
- A non-bank line of credit is the main revolving option for a genuinely new business. It works exactly like a bank line, draw, repay, redraw, but the assessment is based on recent trading rather than years of history.
- A business credit card is often the easiest revolving credit to get early on, and a reasonable bridge for small, everyday expenses. It's not a substitute for a real working-capital line once you're drawing larger amounts.
- Invoice finance isn't a line of credit, but it behaves like one for a business that invoices other businesses, and it's accessible earlier because it's secured against the invoices themselves.
If you want the full mechanics of how a revolving facility compares to the alternative most new owners consider, line of credit vs overdraft covers it in detail.
Under six months of trading, almost nobody reputable will give you a revolving facility. Anyone advertising an "easy business line of credit, no history needed" is charging for that risk in ways you'll feel later, in the rate, the fees, or terms that are hard to exit. If you're that new, a credit card or invoice finance is the honest bridge, and a few more months of clean trading is what actually unlocks the line.
What it actually costs
A new-business line of credit costs more than an established one, and the difference isn't only the interest rate.
Interest is charged on the drawn balance, same as any line. But many lenders also charge a line fee or facility fee on the total limit, including the part you haven't touched. For a new business, this is the number that bites, because early on you often want the limit sitting there as a buffer more than you want to draw on it.
Say you take a $50,000 line of credit and draw an average of $15,000 across the year. You'll pay interest on the $15,000, which is fair enough. But if there's a line fee charged on the full $50,000 limit, you're also paying an ongoing fee on $35,000 you never used. On a new-business facility priced for risk, that fee can quietly become the larger cost.
Before you sign, ask one question: is the ongoing fee charged on the limit, or only on what I draw? On a new-business line you may keep mostly undrawn, a fee on the full limit can cost more across the year than the interest does. That single answer decides whether the facility is cheap insurance or expensive dead weight.
Five real scenarios
The brand-new cafe. Open four months, strong weekend takings but no track record. Too new for a line of credit almost anywhere. A business credit card handles small timing gaps now, and the plan is to revisit a proper line once past six months of clean statements.
The second-year tradie. Eighteen months trading, $30,000 a month, waiting on progress payments. A non-bank line of credit is realistic here, sized to the revenue, and it smooths the gap between doing the work and getting paid for it.
The startup with contracts but no revenue. Signed contracts, nothing invoiced yet. A line of credit isn't the answer, because there's no trading revenue to assess. Once invoices start going out, invoice finance can advance against them, which is often the first real working-capital tool a contract business can access.
The new transport sub-contractor. Three months in, hauling for one large head contractor on 30-day terms. Rather than a line of credit it can't yet get, invoice finance against that head contractor's invoices bridges the wait, and the facility grows as the work does.
The buyout of an existing business. New ABN, but the business being bought has years of trading behind it. This is the exception, the established trading history and cash flow of the acquired business can support a facility that a from-scratch startup couldn't get. Structure matters here, so it's worth talking through.
Building toward a bank facility
If a bank line of credit is the goal, the path is straightforward, if not fast: give the bank the history it wants.
Twelve to twenty-four months of clean bank statements, steady revenue, and a facility you've managed sensibly (drawn and repaid, not permanently maxed) is what moves you from "too new" to "bankable". A non-bank line of credit in the meantime isn't just a stopgap. Managed well, it's the trading record that helps you graduate to cheaper bank pricing later.
The mistake to avoid is treating a revolving facility as permanent working capital that never returns to zero. A line that's always fully drawn has quietly become a term loan with a worse rate, and it reads poorly when a bank eventually looks at how you ran it.
If your bank has said no
A new-business knock-back from a bank is a policy outcome, not a verdict on the business. Bank policy is narrower than the market, and a short history is the single most common reason behind an early "no".
Non-bank lenders assess differently, weighting recent trading and cash flow over years of history, which is why a strong six-month-old business can be declined by a bank and approved by a non-bank lender the same week. There are genuine alternatives after a bank decline, and for newer businesses specifically, more options than most owners expect.
The trade-off is honest: non-bank pricing sits above bank pricing. If your bank will give you a facility on terms you're happy with, take it. This is the answer for when they won't, or can't do it in a timeframe that helps.
Under six months trading, use a credit card or invoice finance and wait. Six to twenty-four months, a non-bank line of credit is your realistic revolving option. Past two years with clean statements, take it to a bank for the best price. Match the facility to your age, not to the ad.
Common questions
Can I get a line of credit with no trading history?
Almost never a true revolving line of credit. With no trading history, realistic options are a business credit card, equipment finance secured on the asset you're buying, or, once you start invoicing, invoice finance. A line of credit generally needs around six months of trading and consistent revenue behind it.
What's the difference between a line of credit and an overdraft for a new business?
An overdraft is attached to your bank account and comes from your existing bank, which usually wants two or more years of trading, so it's often out of reach for a new business. A line of credit is a standalone facility available from non-bank lenders from around six months, which makes it the more accessible revolving option early on. Line of credit vs overdraft breaks down the full difference.
How much line of credit can a new business get?
Limits for newer businesses start smaller and grow with trading history. A common approach is to size the limit against monthly revenue, so a business turning over $30,000 a month might start with a modest five-figure line rather than a large one. The limit typically increases as you build a clean track record.
Is a business credit card easier to get than a line of credit?
Usually, yes. A business credit card is often the easiest revolving credit for a new business and a reasonable bridge for small, everyday expenses. The limitation is size and cost: cards suit modest, short-term spending, not larger working-capital needs, where a line of credit is the better structure once you qualify.
Will shopping around for a line of credit hurt my credit file?
Checking your options doesn't. Comparing facilities and seeing indicative offers can be done without touching your credit file, and a formal credit check only happens if you choose to proceed with a specific lender. That's the point of comparing through a single enquiry rather than applying to five lenders separately.
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