1. What is the money actually for?
"Things are tight" is not a purpose a lender — or you — can properly assess. A specific purpose (an asset, a defined cash gap, a confirmed piece of work) is a different decision than a general sense of pressure, and it points to a different product.
2. Is this a timing problem or a viability problem?
A loan can bridge a genuine timing gap — a slow-paying customer, a seasonal dip, a one-off cost. It will not fix a business that loses money in most months regardless of timing. Borrowing on top of an undiagnosed viability problem usually just adds a repayment to it.
3. Can the business carry the repayment in a normal month?
Test the new repayment against typical trading, not the best month of the year. If the numbers only work when everything goes right, the request needs another look before it goes further.
4. What happens if the benefit takes longer to arrive than planned?
New equipment that takes longer to lift capacity, growth that comes in slower than forecast — the repayment schedule does not wait for the benefit to show up. Build in a realistic delay and check the plan still holds.
5. What's the total cost, not just the repayment?
Interest and fees are only part of it. Security, personal guarantees, minimums and exit conditions all affect what the facility actually costs and how much flexibility the business keeps.
6. Is there a cheaper or more appropriate way to fund this specific need?
Cash, a different finance product matched to the need — invoice finance for a receivables gap rather than a term loan, for example — or delaying the spend can sometimes achieve the same outcome for less cost or risk.
What's the cost of not borrowing?
The question is not "should the business ever borrow." It is whether this specific request meets this specific need at a cost the business can carry. A missed opportunity, a lost customer or a bigger problem later also has a cost — it just doesn't show up on a loan schedule.
Useful official guidance
The Australian Government's business-loan guide recommends understanding income, expenses, debts and cash flow, and deciding how much is needed and what the business can repay before applying.
Answer the questions before you fill in the application.
If the need and amount are already clear, start the enquiry. If you're still not sure this is the right move, get a clear read on the business first.
General information only. Approval, rates, fees, terms and timing depend on the applicant, product and lender assessment. This article does not replace credit, financial or legal advice for your circumstances.