How to Fund a New Business in Australia: 11 Proven Options for 2026

Key Takeaways:

• Over 437,000 new businesses were registered in Australia in FY 2024–25 — access to capital remains the #1 barrier to getting started.

• The Australian Government and state governments offer hundreds of active grants and programs for new businesses, including NEIS, the Industry Growth Program, and the R&D Tax Incentive (43.5% refundable offset).

• Secured small business loan rates start from approximately 6.39% p.a. in 2026; fintech lenders can approve funding within 24 hours with less paperwork than banks.

• Equity crowdfunding (Crowd-Sourced Funding) is now ASIC-regulated — eligible companies can raise up to $5 million per year from the public without giving up control.

• The right funding mix depends on your stage, industry, and how much equity you're willing to give away — most successful startups combine 2–3 sources.

• Australia faces a $38 billion equity funding gap for growth-stage businesses — angel investors and venture capital are increasingly active, especially in tech, health, and clean energy.

Starting a business is one of the most exciting — and financially demanding — decisions you can make. Whether you have a fully-formed business plan or just a promising idea, one question comes up almost immediately: where is the money going to come from?

The good news is that the funding landscape for new Australian businesses has expanded dramatically in recent years. Beyond the traditional bank loan, there are now government grants, fintech lenders, equity crowdfunding platforms, revenue-based financing, and a growing ecosystem of angel investors and accelerator programs — many of which didn't exist a decade ago.

This guide covers 11 proven funding options available to new businesses in Australia in 2026, with current rates, eligibility information, and practical guidance on where to start.

📌 Quick stat: Australia had 2,729,648 actively trading businesses as of June 2025, with small businesses making up 97.3% of all businesses nationwide. Source: Australian Bureau of Statistics

How much does it cost to start a business in Australia?

Startup costs vary widely depending on your industry, business model, and whether you're operating online, from home, or from a physical premises. As a rough guide:

• Micro / online businesses: $500–$5,000 (domain, hosting, ABN registration, software subscriptions)

• Service-based businesses (consulting, trades): $5,000–$25,000 (tools, insurance, website, marketing)

• Retail / food & beverage (bricks and mortar): $50,000–$300,000+ (fitout, stock, equipment, lease deposit)

• Tech startups: $20,000–$500,000+ depending on development requirements

Regardless of how much you need, understanding your options before you approach any lender or investor will put you in a much stronger position.

1. Government grants and programs

Australia's federal and state governments offer hundreds of grant programs, rebates, and support schemes for new and growing businesses. Unlike loans, grants don't need to be repaid — but they do come with eligibility criteria and reporting obligations.

💡 Where to search: The business.gov.au grants and programs finder is the official tool to search all active federal and state grant opportunities by business stage, industry, and location. You can also search GrantConnect for Commonwealth grants.

Key Federal Programs for New Businesses

New Enterprise Incentive Scheme (NEIS) / Self-Employment Assistance. One of the most practical programs for individuals starting a business from scratch. NEIS provides free accredited small business training, business mentoring for up to 12 months, and a fortnightly allowance (equivalent to the JobSeeker rate) for up to 39 weeks while you establish your business. Access it through Australia's employment services network.

Industry Growth Program. A $400 million federal program supporting startups and SMEs with high-growth potential, particularly in priority sectors like clean energy, advanced manufacturing, and the digital economy. Offers both early-stage and growth-stage grants with co-investment requirements.

R&D Tax Incentive. One of the most valuable — and underused — programs for technology and product-based startups. If your business is conducting eligible research and development activities, you may be entitled to a 43.5% refundable tax offset (for companies with aggregated turnover under $20 million). This can effectively return a significant portion of your development spend. Register your R&D activities with AusIndustry and claim through your company tax return.

Export Market Development Grants (EMDG). If you're building a business with an export component, EMDG provides reimbursement of up to 50% of eligible export promotion expenses. Round 4 allocates $104.5 million annually across three tiers.

State and territory grants snapshot (2025–26)

State programs change frequently. Always verify current availability and eligibility via your state government's business portal before applying.

2. Bank and credit union loans

Traditional bank loans remain a core funding option for new businesses that can demonstrate serviceability. Australia's major banks — Commonwealth Bank, NAB, ANZ, and Westpac — all offer small business lending, as do regional banks and credit unions.

What banks look for

• A detailed business plan with realistic financial projections

• Personal and/or business credit history

• Security (often residential property as collateral for larger loans)

• Evidence of personal contribution / skin in the game (typically 20–30%)

• Industry experience of the business owner(s)

Current small business loan rates (2026)

The RBA's cash rate currently sits at 3.85% following a February 2026 adjustment. Indicative small business loan rates as of early 2026:

• Secured business loans (Big Four banks): from approximately 6.39% p.a.

• Unsecured business loans (banks): from approximately 8.5–14% p.a.

• Business lines of credit: from approximately 7–12% p.a.

Always compare the comparison rate (not just the advertised rate), which includes fees and charges. Rates vary significantly by lender, loan amount, loan term, and your business profile.

⚠️ Unfair Contract Terms — KNOW YOUR RIGHTS: Since November 2023, unfair contract terms in small business loan contracts are nowunlawful(not merely voidable) under the Australian Consumer Law, with penalties up to $50 million for corporations. If you're signing a loan contract, you have the right to ask your lender to explain any term that appears one-sided. Seek independent legal advice before signing for significant loan amounts. Source: ACCC

3. Non-bank lenders: a flexible alternative to the big banks

If your business doesn't meet the strict eligibility criteria of a traditional bank — perhaps because you're newly self-employed, have a limited trading history, or hold an irregular income — a specialist non-bank lender could be the right path. Non-bank lenders operate under different rules to the major banks, often taking a more holistic view of your financial position and business circumstances.

Australia's non-bank lending market has grown considerably in recent years, fuelled by tighter bank lending standards and a wave of new digital platforms. It is projected to exceed $20 billion in 2025.

Pepper Money — commercial and asset finance for business owners

Of the lenders reviewed on the Friendly Finance panel, Pepper Money is the standout option for business owners seeking commercial financing. As one of Australia's largest non-bank lenders — managing over $20 billion in assets and having served more than 570,000 customers — Pepper Money offers a range of products specifically designed for business borrowers who may not qualify with the Big Four banks.

Pepper Money's business lending products include:

• Commercial property loans — For purchasing or refinancing commercial premises such as retail spaces, industrial units, warehouses, medical suites, and mixed-use properties. Flexible terms with cash-out options and multiple income verification pathways.

• Equipment and asset finance — Structured lending for business-critical assets including vehicles, heavy machinery (forklifts, excavators), technology, and tools. Typically secured against the asset being financed.

• Self-employed and AltDoc lending — Pepper Money is particularly well suited to sole traders and small business owners who cannot provide standard payslips or full financial statements. Their AltDoc Xpress product uses a streamlined digital verification process for self-employed borrowers.

💡 Good to know: Pepper Money reports that approximately 40% of its home loans currently go to self-employed borrowers — a sign of how well the lender understands and serves this segment. If you're a new business owner using your home equity to fund your venture, or a sole trader looking for equipment finance, Pepper Money is worth exploring. Read the full Pepper Money review on Friendly Finance.

Things to consider: Interest rates at specialist non-bank lenders like Pepper Money can be higher than the Big Four banks, particularly for borrowers with complex income or shorter trading histories. Always compare the comparison rate (inclusive of fees), and consider getting independent advice before committing to a commercial loan. Applications are subject to credit assessment and eligibility criteria.

📌 Note on our lender panel: Most lenders reviewed on the Friendly Finance panel specialise in personal, consumer, and short-term lending. If you're specifically looking for dedicated small business lending products (e.g. unsecured business loans, invoice finance, or business lines of credit), you may also want to explore purpose-built business lenders such as Prospa, Lumi, or Bizcap, which sit outside our current review panel but are well-established in the Australian market.

4. Revenue-based financing

Revenue-based financing (RBF) is a relatively new funding model that has gained traction in Australia, particularly among SaaS, subscription, and e-commerce businesses. Instead of fixed monthly repayments, you repay the capital as a percentage of your monthly revenue — meaning repayments flex up when business is good and down during slower periods.

There's no equity dilution, no personal guarantee required in most cases, and no fixed repayment schedule. Providers operating in Australia include Lighter Capital (US-based, now active in AU for tech startups) and several embedded finance providers through accounting platforms.

RBF typically suits businesses with recurring revenue above $20,000–$30,000 per month. It's not suited to businesses with no revenue history or highly seasonal, unpredictable income.

5. Angel investors and venture capital

If you're building a high-growth business — particularly in technology, health tech, fintech, or clean energy — equity investment from angel investors or venture capital firms could be the right path. In exchange for capital, you give up a percentage of ownership (equity) in your business.

A 2024 report from the Australian Business Growth Fund (ABGF) identified a $38 billion equity funding gap affecting approximately 164,000 growth-stage businesses in Australia — indicating strong demand and improving supply of equity capital.

Australian angel investor networks

• Sydney Angels — One of Australia's most active angel networks, with over 130 members.

• Melbourne Angels — Melbourne's leading angel investor community.

• Scale Investors — Focused on backing female-led startups across Australia.

• Perth Angels — WA-focused angel network.

Venture capital and early-stage funds

Notable Australian VC firms active at the seed and early-stage level include Blackbird Ventures, Square Peg Capital, AirTree Ventures, Folklore Ventures, and Possible Ventures. The federal government's ESIC (Early Stage Innovation Company) tax incentives provide angel investors with a 20% non-refundable tax offset and CGT exemption on qualifying investments, making angel funding more attractive for investors and founders alike.

6. Equity crowdfunding (Crowd-Sourced Funding)

Don't confuse this with rewards-based crowdfunding — equity crowdfunding is a fundamentally different model. Under Australia's Crowd-Sourced Funding (CSF) framework, regulated by ASIC, eligible companies can raise up to $5 million per year from the general public in exchange for shares. Investors receive actual equity in your business.

To be eligible, your company must be an unlisted Australian public company with consolidated gross assets and annual revenue each under $25 million. Key platforms facilitating CSF raises in Australia include:

• Birchal — Australia's largest equity crowdfunding platform

• Equitise — Operates across Australia and New Zealand

• OnMarket — Broader investment platform with CSF capabilities

Converting from a proprietary company (Pty Ltd) to a public company is required — a process that involves ASIC registration and some administrative overhead. Speak to a corporate lawyer or accountant before beginning this process.

7. Rewards-based crowdfunding

Platforms like Kickstarter and Indiegogo allow you to raise funds from backers in exchange for a product, experience, or reward — not equity. This is particularly effective for creative projects, physical products, and businesses that can generate buzz around a launch.

Beyond the capital raised, a successful crowdfunding campaign validates market demand and builds a community of early adopters before you've even launched. It's also a powerful marketing tool in its own right.

Key considerations: Campaign success requires significant upfront effort in video production, marketing, and community building. Platforms typically take 5–10% of funds raised. Kickstarter operates on an all-or-nothing model — you only receive funds if you hit your target.

8. Invoice financing and trade finance

If your business will be invoicing other businesses (B2B), invoice financing lets you access up to 80–95% of the value of outstanding invoices immediately, rather than waiting 30–90 days for clients to pay. This is one of the most effective solutions for cash flow gaps in the early months of trading.

Leading providers in Australia include ScotPac (Australia's largest non-bank SME funder), Earlypay, and Octet. Invoice financing is not a loan — you're advancing your own receivables — so it doesn't add debt to your balance sheet in the traditional sense.

9. Startup accelerators and incubators

Accelerators and incubators offer more than money — they provide mentorship, networks, co-working space, and in many cases, a small equity investment or grant in exchange for program participation. They are particularly valuable for tech and innovation-focused startups at the idea or early stage.

Notable Australian programs include:

• Startmate — Australia and NZ's most prominent accelerator; $120K investment for 7.5% equity

• Antler Australia — Global accelerator with a strong Sydney presence; pre-idea and early stage

• BlueChilli — Corporate-backed accelerator focused on tech ventures

• muru-D (Telstra Ventures) — One of Australia's original accelerators; industry-specific programs

• SproutX — Australia's leading agri-food tech accelerator

• Stone & Chalk — Fintech and deeptech hub with accelerator programs in Sydney and Melbourne

10. Friends and Family Funding

Friends and family are the most common source of early-stage startup capital — and often the fastest to access. But mixing personal relationships with business finance carries real risks if things don't go to plan.

If you do accept money from people you know, treat it with the same rigour as professional investment:

• Put everything in writing — whether it's a loan agreement or an equity arrangement

• Be explicit about whether the money is a gift, a loan (with repayment terms), or equity

• Involve a solicitor for any amount above a few thousand dollars

• Be honest about the risks — most startups fail, and investors (including loved ones) should know this

11. Personal Savings and Bootstrapping

Self-funding remains the most common starting point for Australian small businesses. Using your own savings means no debt, no equity dilution, and full control — but it also concentrates personal financial risk.

Consider separating business and personal finances immediately by opening a dedicated business bank account. This simplifies tax time, makes your business appear more professional to future lenders, and creates a clear audit trail. The ATO's starting a business guide is a useful reference for your obligations from day one.

Comparison: Which Funding Option Suits You?

How to prepare your funding application

Regardless of which funding path you pursue, preparation is critical. Here's a checklist of what most lenders, investors, and grant bodies will want to see:

1. Clear business plan with executive summary

2. 12–24 month financial projections (P&L, cash flow)

3. Details of personal financial position

4. Evidence of market research / customer validation

5. ABN / ACN registration documents

6. Details of any existing assets or security

7. Details of founders' experience and background

8. Clear explanation of how funds will be used

9. Exit or repayment strategy (for investors / loans)

10. Details of any co-investors or existing funding

💡 Tip: Most new business owners seek funding too late — when they're already under cash flow pressure. Start your funding conversations 3–6 months before you need the capital. This gives you time to compare options, meet eligibility requirements, and negotiate from a position of strength rather than urgency.

Frequently Asked Questions

What is the easiest way to get funding for a new business in Australia?

For most new businesses, the easiest starting points are personal savings, friends and family funding, or a government program like NEIS. Fintech lenders like Prospa and Lumi can also approve small business loans within 24 hours, making them faster than traditional banks — though interest rates are typically higher.

Can I get a government grant to start a business in Australia?

Yes. The Australian Government and state governments offer a wide range of grants and programs for new businesses. Use the business.gov.au grants and programs finder to search what's available in your state and industry. Key programs include NEIS, the Industry Growth Program, and the R&D Tax Incentive.

What is the R&D Tax Incentive and how does it help new businesses?

The R&D Tax Incentive is an Australian Government program offering a 43.5% refundable tax offset for eligible R&D expenditure for companies with aggregated turnover under $20 million. For new tech or product-based businesses, this can return tens of thousands of dollars in development costs. Register your R&D activities with AusIndustry and claim through your company tax return.

What are current small business loan rates in Australia?

As of early 2026, secured small business loan rates start from around 6.39% p.a. Unsecured loans from fintech lenders range from approximately 9% to 35%+ p.a. The RBA cash rate is currently 3.85% following a February 2026 adjustment. Always compare the comparison rate, not just the advertised rate.

What is the difference between rewards-based crowdfunding and equity crowdfunding?

Rewards-based crowdfunding (Kickstarter, Indiegogo) raises money from backers in exchange for a product or reward — no equity is given up. Equity crowdfunding (Crowd-Sourced Funding, regulated by ASIC) lets eligible Australian companies raise up to $5 million per year from the public in exchange for shares. Platforms like Birchal and Equitise facilitate CSF raises.

Do I need a business plan to get a startup loan?

For bank loans, a detailed business plan is almost always required. Fintech lenders have lighter requirements — some approve loans based on cash flow data alone — but a solid plan still strengthens any application and shows lenders and investors that you've done your homework.