A food manufacturer in Fremantle has been trading under its current business for:
14 months.
The business produces packaged food products supplied to independent retailers, cafés and several wholesale customers across Perth.
Sales have grown faster than expected.
But there is a problem.
The business is still filling and sealing much of its product manually.
That was manageable when order volumes were lower.
It is now becoming the bottleneck.
The owner has been quoted:
$64,000
for an automatic filling and sealing machine.
The equipment could allow the business to process larger production runs without relying on the same amount of manual packing.
The owner wants finance.
Then comes the question:
“How long has the business been trading?”
Fourteen months.
And immediately the owner wonders:
“Is our ABN too new to get equipment finance?”
Not necessarily.
A newer business may still have equipment-finance options.
But the conversation can be different from financing equipment for a company that has been operating for 10 or 20 years.
What Does “New Business” Actually Mean?
This is the first thing worth establishing.
A business with a relatively new ABN isn’t automatically a startup with:
no customers,
no revenue,
and no trading history.
Consider the Fremantle manufacturer.
It has only been operating under its current business for 14 months.
But during those 14 months it has:
manufactured product,
sold to customers,
received repeat orders,
paid suppliers,
employed staff,
and built wholesale relationships.
That’s very different from someone registering an ABN yesterday and wanting to finance machinery before making their first sale.
Both businesses have relatively new ABNs.
They aren’t the same finance application.
Why Is the Business Buying the Machine?
This is where the scenario becomes commercially important.
The owner isn’t buying:
a $64,000 machine
because they hope one day the business becomes large enough to use it.
The business already has a production problem.
Orders have increased.
Production can make more product than the existing manual packing process can efficiently handle.
Staff are spending significant time:
filling,
portioning,
sealing,
checking,
and preparing finished product for dispatch.
The owner has reached the point where the question isn’t:
“Will we ever need automation?”
It’s:
“Are we reaching the point where continuing to do this manually is restricting us?”
That’s a Much Better Equipment-Finance Conversation
When a newer business needs equipment, we want to understand:
what is happening now,
not simply what the owner hopes will happen later.
Is there existing demand?
Is there existing revenue?
What problem does the equipment solve?
Why is the purchase required now?
For this business, the answers can be demonstrated.
The Business Has Real Wholesale Orders
Suppose the manufacturer started by selling:
direct to customers,
at markets,
and through a small number of local retailers.
Over time, more wholesale customers came on board.
Now several retailers order regularly.
A hospitality distributor has also begun placing recurring orders.
The owner has been approached about increasing supply to additional stores.
That creates a very different situation from:
“We’re buying this machine because we think wholesale might take off.”
There is already commercial activity behind the purchase.
A New ABN Is Only One Part of the Picture
Depending on the lender and transaction, a newer business may be assessed using information such as:
trading history,
business bank statements,
revenue,
BAS,
financial information,
credit profile,
industry experience,
equipment being purchased,
purchase price,
cash contribution,
and existing commitments.
Requirements vary.
The point is that:
ABN age alone doesn’t tell the whole story.
Compare Three Businesses
Imagine three people call Thrive Broking asking for:
$64,000
of equipment finance.
Business One
ABN:
three weeks old.
Revenue:
none yet.
Customers:
none yet.
Equipment:
$64,000 packaging machine.
Reason:
“We’re launching a food business.”
Business Two
ABN:
14 months old.
Revenue:
established and increasing.
Customers:
retail and wholesale customers already ordering.
Equipment:
$64,000 filling and sealing machine.
Reason:
“Our current packing process is restricting production.”
Business Three
ABN:
six months old.
Owner:
15 years’ experience operating production equipment for another food manufacturer.
The owner has established a new business and already secured customers.
Again:
$64,000 equipment requirement.
All three businesses are relatively new.
But their circumstances are completely different.
Trading History Helps Tell the Story
An established business may have years of:
financial statements,
tax returns,
BAS,
and bank transaction history.
A 14-month-old business obviously cannot provide:
five years of trading history.
It didn’t exist five years ago.
That doesn’t automatically make the business unsuitable.
It means the available evidence is different.
What Can the Fremantle Business Show?
It may be able to show:
money coming into the business account,
supplier payments,
customer receipts,
BAS,
sales records,
wholesale orders,
and other evidence of actual trading activity.
That helps demonstrate:
this isn’t simply a business plan.
It is an operating business.
How Much Revenue Is It Actually Producing?
This is where vague descriptions should become numbers.
The owner says:
“We’re growing quickly.”
Fine.
What does that mean?
Perhaps monthly sales have developed approximately like this:
Early trading:
around $25,000 to $30,000 a month.
Several months later:
around $40,000 to $50,000.
More recently:
around $65,000 to $75,000.
Those figures are illustrative.
But that is the type of information that helps explain what:
“growing quickly”
actually means.
Why Has Packaging Become the Problem?
Imagine the production team can manufacture enough product for:
4,000 units
during a production run.
But the existing packing process cannot efficiently:
fill,
seal,
label,
and prepare
that volume at the same pace.
Production starts backing up.
Staff work additional hours.
Orders take longer to prepare.
The business may delay accepting larger orders because it doesn’t want to promise volumes it cannot reliably pack.
Now there is a genuine equipment problem.
What Does the $64,000 Machine Do?
The proposed automatic filling and sealing machine assists with repetitive parts of the packaging process.
Depending on the particular machine and product, it may help:
increase throughput,
improve consistency,
reduce repetitive manual handling,
and increase production capacity.
But we shouldn’t assume:
machine = instant profit.
The commercial benefit needs to be assessed realistically.
Don’t Build the Application Around the Manufacturer’s Maximum Speed
The equipment brochure might advertise:
a particular number of units per minute.
That is not necessarily what the Fremantle business will achieve continuously.
Real production can involve:
setup,
product changes,
cleaning,
maintenance,
packaging changes,
staffing,
and downtime.
The business case should use realistic production assumptions.
“The Machine Will Triple Our Revenue” Isn’t Enough
Maybe it could contribute to substantial growth.
But a lender isn’t necessarily going to accept:
“Buy machine, revenue triples.”
There needs to be a connection between:
the equipment
and
the commercial opportunity.
For example:
existing wholesale customers want larger quantities,
new customers have approached the business,
current production is constrained by packing capacity,
and the machine removes part of that constraint.
That is much more meaningful.
Industry Experience Can Matter
Now suppose the business is only 14 months old, but the owner has:
11 years of experience
in food production, distribution or wholesale.
Tell the broker.
That doesn’t magically turn:
14 months of business history
into:
11 years of business history.
But it provides context.
The owner may already understand:
production,
suppliers,
food distribution,
wholesale customers,
inventory,
and operating margins.
Don’t Confuse Industry Experience With Trading History
This distinction matters.
If the business has operated for:
14 months,
say:
14 months.
Then explain:
“Before starting the business, I spent 11 years working in food manufacturing.”
That’s clear.
What if the ABN Is New Because the Business Structure Changed?
This is another situation that can arise.
Someone may have operated as:
a sole trader
and later established:
a company.
The company ABN may be relatively new.
But there may be previous business history behind it.
Tell the broker exactly what happened.
For example:
“I operated the business as a sole trader for four years and moved it into a company eight months ago.”
That’s different from:
“I started trading eight months ago.”
How previous history is treated will depend on the lender and circumstances.
What if the Business Really Is Brand New?
That’s a different conversation.
Suppose the ABN was registered:
six weeks ago.
The owner wants:
$120,000
of manufacturing equipment.
There is:
limited trading history,
little business revenue,
and no completed financial year.
Potential finance options may be more limited.
The assessment may place greater emphasis on matters such as:
the owner,
industry experience,
financial position,
cash contribution,
customers or contracts,
business plan,
and the equipment.
New Business Doesn’t Mean Guaranteed Finance
This is important.
The fact that equipment finance may be possible for some newer businesses doesn’t mean:
every new ABN can borrow.
The amount requested still needs to make sense.
The business still needs to demonstrate an ability to support the commitment.
The equipment still needs to be acceptable.
The complete transaction matters.
The Amount Matters Too
A 14-month-old business asking for:
$25,000
of equipment
may present differently from the same business asking for:
$750,000.
The scale of the commitment needs to make sense in the context of the operation.
Does $64,000 Make Sense for This Business?
That’s exactly what needs to be assessed.
If the Fremantle manufacturer is generating:
meaningful recurring sales
and can demonstrate increasing production demand, a $64,000 equipment requirement can be considered in that context.
If the business is generating:
$5,000 a month
and wants:
$64,000 equipment,
that’s a different conversation.
What if the Owner Has a Large Deposit?
Suppose the owner can contribute:
$20,000.
The finance requirement becomes:
$44,000.
That may change the transaction.
But we also need to understand:
what happens to the business’s cash afterwards?
A growing food manufacturer may need money for:
ingredients,
packaging,
wages,
freight,
rent,
utilities,
and additional stock.
Putting every available dollar into an equipment deposit may create a working-capital problem.
What if There Is No Deposit?
Say so.
Don’t build the application around money that isn’t available.
Tell the broker:
the machine is $64,000,
the business has traded 14 months,
these are the current sales,
this is why the equipment is required,
and this is the cash position.
Then potential options can be investigated.
Growth Can Consume Cash
This is one of the traps newer businesses can encounter.
Sales increase.
That’s good.
But higher sales may require:
more ingredients,
more packaging,
more labour,
more freight,
and more inventory
before customers pay.
The packaging machine might solve:
production capacity.
It doesn’t automatically solve:
working capital.
Imagine the Business Wins a Major Wholesale Customer
The new customer wants:
10,000 units a month.
Excellent.
But the business now needs to purchase:
ingredients,
containers,
labels,
cartons,
and other inputs
before all of that revenue arrives.
The business may need both:
equipment
and
cash to support the increased production.
Don’t Try to Put Every Cost Into Equipment Finance
If the business needs:
$64,000 for machinery
plus:
$40,000 of additional working capital,
those are different requirements.
Tell the broker both.
There may need to be different finance solutions depending on the circumstances.
What if the Machine Is Imported?
This can happen with specialist food-manufacturing equipment.
Now the owner needs to understand:
purchase price,
currency,
freight,
customs,
electrical requirements,
installation,
commissioning,
parts,
warranty,
and ongoing support.
A machine advertised at:
$64,000
may not cost:
$64,000
by the time it is operating in Fremantle.
The Installed Cost Might Be Higher
For example:
Machine:
$64,000.
Freight:
$4,000.
Electrical work:
$3,500.
Commissioning:
$2,500.
Additional change parts:
$3,000.
Total project:
$77,000.
Those figures are illustrative.
The important point is:
establish the complete project cost.
Not every associated expense will necessarily be eligible under the same equipment-finance structure.
What if the Equipment Is Purchased From an Australian Supplier?
That may simplify:
delivery,
support,
installation,
and documentation.
But the lender still needs to assess:
the business
and
the transaction.
The Equipment Doesn’t Have to Be a Truck or Excavator
A newer business may require finance for many different productive assets.
Depending on the business and lender, that could potentially include:
packaging machinery,
food-processing equipment,
commercial refrigeration,
CNC machines,
laser cutters,
robotics,
commercial cleaning equipment,
medical equipment,
dental equipment,
printing machinery,
warehouse equipment,
forklifts,
gym equipment,
and other specialist business assets.
The actual equipment needs to be considered.
A New Dental Practice Has the Same Basic Question
Imagine a dentist establishes a new practice.
The business needs:
dental chairs,
sterilisation equipment,
imaging equipment,
and other specialist assets.
The company may be new.
The dentist may have:
15 years of professional experience.
That’s useful context.
But the new practice still needs to demonstrate how the proposed finance fits the business.
A New Commercial Cleaning Business Could Be Similar
Suppose someone establishes a commercial cleaning company after years working in the industry.
Within eight months, the business secures several commercial contracts and needs:
ride-on scrubbers,
commercial vacuums,
or robotic floor-cleaning equipment.
Again:
new business.
Experienced operator.
Existing contracts.
Equipment required to deliver the work.
That’s a very different scenario from buying equipment before any customers exist.
A New Fabrication Business Might Need CNC Equipment
A fabricator leaves an established employer and starts their own workshop.
Six months later, customers are already sending work.
The owner needs:
a CNC plasma cutter
to bring cutting work in-house.
The business is new.
The equipment requirement may still have a clear commercial rationale.
Contracts and Orders Help Explain Why the Equipment Is Needed
They don’t guarantee approval.
But they can help answer:
“Why now?”
For the Fremantle manufacturer:
the answer is existing demand.
The business isn’t buying capacity years ahead of when it expects to need it.
It is responding to a bottleneck that has already developed.
But One Big Order Can Be Different From Recurring Demand
Suppose the owner says:
“We’ve got a $200,000 order.”
Good.
But is that:
one order
or
the beginning of an ongoing supply relationship?
Does the business have other customers?
What margin is in the work?
Can it deliver?
The quality of the underlying business still matters.
Customer Concentration Can Matter
Imagine:
80% of the business’s revenue
comes from one wholesale customer.
That is worth understanding.
If that customer stopped ordering, what would happen?
A newer business with a broader customer base may present differently from one almost entirely dependent on one buyer.
What About Profitability?
Rapidly growing businesses don’t always show large profits immediately.
Money may be reinvested into:
staff,
stock,
marketing,
premises,
equipment,
and growth.
That doesn’t automatically prevent finance.
But the lender still needs to assess repayment capacity.
Revenue alone isn’t enough.
What Should a Newer Business Prepare?
Start with:
the equipment quote.
Then be ready to explain:
when the business started,
what it sells,
who its customers are,
current turnover,
recent sales trend,
industry experience,
why the equipment is needed,
how it will be used,
purchase price,
and available contribution.
Depending on the lender and application, additional financial information may be required.
Don’t Hide the Difficult Parts
If the business had:
a slow first six months,
say so.
If one large customer represents:
half the revenue,
say so.
If the owner recently changed the business structure:
explain it.
If the business needs:
working capital as well as equipment finance,
tell the broker.
It’s easier to assess the real situation than a cleaned-up version that falls apart when the documents arrive.
Back to the Fremantle Manufacturer
The owner initially thought the main problem was:
the ABN is only 14 months old.
But that’s not the complete finance story.
The business can show:
14 months of trading,
increasing sales,
repeat customers,
wholesale orders,
industry experience,
and an identifiable production constraint.
The equipment is:
a $64,000 automatic filling and sealing machine.
The purpose is:
to increase packaging capacity in an operating food-manufacturing business.
That doesn’t mean approval is guaranteed.
It means there is a genuine transaction to investigate.
Don’t Assume You Have to Wait Two Years
Business owners sometimes hear:
“You need two years of trading.”
and assume there is no point speaking to anyone until the second anniversary of their ABN.
That isn’t a universal rule across every lender and every equipment-finance transaction.
If you need equipment now, ask the question now.
The answer may be:
there are options.
It may be:
more information is required.
It may be:
a contribution is needed.
Or it may be:
the business isn’t ready for the proposed amount yet.
Knowing that before committing to equipment is useful.
Need Equipment for a Newer Business?
Thrive Broking can look at the actual business behind the ABN.
Tell us:
when you started trading,
what the business does,
your current turnover,
your industry experience,
what equipment you need,
purchase price,
supplier,
and why you need the equipment now.
If you already have:
customers,
contracts,
purchase orders,
or recurring wholesale demand,
tell us that too.
Then we can investigate potential equipment-finance options based on the actual transaction.
Because:
“My ABN is only 14 months old”
isn’t the whole story.
The more useful question is:
“What has the business achieved in those 14 months, and does the equipment purchase make commercial sense now?”