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What is your borrowing capacity?

by OnDeck Australia,   May 05, 2023

One of the biggest hurdles faced by small businesses is access to capital, and access to the necessary funding for the growth and maintenance of their business. This is where borrowing capacity comes in.

Borrowing capacity refers to both the amount of money that a lender is willing to lend to a specific borrower, as well as what a small business can borrow. It’s extremely important for small businesses to have a definitive idea of what this number is, so that they can continue to grow and expand their business without running into financial difficulties in the future.

Borrowing capacity can be influenced by a number of factors, each of which influencing specific steps small business owners can take in order to boost their borrowing capacity.

Strategies to boost your business credit score

1. Maintain a strong credit score

The Maintenance of a strong credit score is one of the most important things small business owners can do to increase borrowing capacity. Credit score can be positively influenced by paying bills on time, staying up to date on loan repayments and keeping credit card balances low. You can check your business credit score for free via OnDeck’s “Know Your Score” tool. 

2. Have a solid business plan 

Having a strong business plan, in tandem with accurate financial projections demonstrates both a strong ability to repay the loans and that businesses have strongly considered any future challenges they may face in loan repayments.

3. Solid Revenue and Cash Flow 

Especially in regards to unsecured loans lenders will assess whether a business has stable volume and sources of revenue, as well as an ability to generate enough cash flow to cover its expenses whilst making loan repayments. By effectively managing and keeping record of their businesses finances, small business owners can demonstrate strong revenue and cash flow to increase their borrowing capacity. 

4. Understanding what type of loan is right for your business

There are a variety of different loan types and sources of finance available to small business owners to borrow from a plethora of different types of financial institutions, each with different borrowing requirements, repayments and costs. Becoming familiar with these different types of loans, for example secured vs unsecured lending is important so business owners get unique finance for their unique business. To learn more about small business finance, visit OnDeck’s small business blog


Having a healthy borrowing capacity is key on a small businesses journey to grow and expand. By maintaining a strong credit score, creating a solid business plan, generating solid revenue and cash flow and understanding what loan is right for you, small business owners can ensure they have the necessary borrowing capacity to help grow their business.


Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at May 2023. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.

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