Quick answer
If you own two businesses, the one that needs the money and earns the income to repay it should usually be the borrower. Because unsecured lenders typically take a personal guarantee from the owner, they'll often look at your other business too: its debts, its tax position and any money moving between the two. Keeping each business's banking separate and explaining any transfers makes the assessment much simpler.
Key points
- The business that needs the funds and can repay them is normally the right borrower.
- Your personal guarantee links the two, so lenders often ask about the other business.
- Money moving between the businesses is removed from turnover and usually needs explaining.
- A tax debt or loan in one business can affect how a lender sees the other.
- Separate bank accounts per entity are a legal requirement for companies, partnerships and trusts.
If you own two businesses, the one that needs the money and earns the income to repay it should usually be the borrower. But because unsecured lenders normally take a personal guarantee from the owner, they’ll often look at the other business too: its debts, its tax position and any money moving between the two. Separate banking and a short explanation make the whole thing far simpler.
Owning more than one business is common. A café owner opens a catering arm. A builder sets up a separate company for a joinery shop. A physio buys a second clinic in a new entity. Each business may be healthy on its own, but when one of them applies for finance, the lender wants to understand how they fit together.
Which business should be the borrower?
As a rule, the business that will use the money and earn the income to repay it. An unsecured business loan is sized on the borrower’s own turnover and bank statements. If the café needs a new espresso machine, the café should borrow, because the café’s takings will repay it.
Borrowing in one business to fund the other is possible, but it complicates things:
- the borrower’s statements show money leaving to another entity, which looks like a cost with nothing coming back;
- the lender has to judge two businesses instead of one;
- the business carrying the repayments may not be the one that benefits from the spending.
If the second business is newer and can’t yet support a loan on its own, it can sometimes make sense for the established one to borrow. In that case, be clear about it from the start and explain how the money will be used and repaid.
Why does a lender care about your other business?
Mostly because of the guarantee. Most unsecured business lenders ask the directors or owners to guarantee the loan personally. Once you’re a guarantor, the lender is relying on you as well as the business, and your other business is part of your personal position.
business.gov.au’s guide to applying for a business loan notes that lenders typically want your personal financial information alongside the business’s. For an owner of two businesses, that naturally includes the other one. A lender will typically want to know:
| Question about the other business | Why it matters |
|---|---|
| Is it trading profitably? | A struggling sister business can draw on your time, money and the borrower’s cash |
| What debts does it have? | You may already be guaranteeing them, which adds to your total exposure |
| Does it owe the ATO? | Tax debt in one entity can put pressure on the owner and the other entity |
| Does money move between the two? | Transfers affect how the borrower’s turnover and costs are read |
| Do they share staff, premises or equipment? | Shared costs need to be split sensibly to see each business clearly |
None of this means the other business has to be perfect. It means the lender wants no surprises.
How are transfers between the two businesses read?
Like transfers between your own accounts, they’re stripped out of turnover. A deposit from your other business isn’t a customer paying for goods or services, so it doesn’t count towards the income the loan is sized on. Payments going the other way can look like costs, which reduces the apparent room for repayments.
Common reasons for inter-business transfers, and what to say about them:
- Shared staff or wages. “The café pays two staff who also work for the catering business; catering reimburses the café each fortnight.”
- Shared premises. “The joinery shop pays rent to the building company, which holds the lease.”
- Short-term support. “The clinic lent the new clinic $20k to cover its first quarter’s wages; it’s being repaid monthly.”
- Management fees. “The holding company charges each business a fixed monthly fee for admin and bookkeeping.”
The ATO’s guidance on banking records makes the point that partnerships, companies and trusts must each have a separate bank account, and business.gov.au’s page on setting up a business bank account says the same. When each business has its own account and transfers are labelled, a lender can follow the money in minutes.
Our guide to unsecured loans with several bank accounts covers how to lay out a multi-account picture so it reads clearly.
What if one business has debts or tax problems?
It’s common for one business to be doing well while the other is under strain. That doesn’t rule out borrowing for the healthy one, but it needs handling honestly.
If the other business owes the ATO, show whether a payment plan is in place and that it’s being met. ATO debt is considered case by case, and our ATO tax debt loans page explains how lenders think about it. If the other business has expensive short-term loans, a lender will count those repayments as part of your exposure as guarantor. Sometimes the better first step is to tidy up that debt; our business debt refinance page explains when consolidating makes sense.
What lenders worry about most is the healthy business being used to prop up the struggling one. If that’s not happening, show it with clean, separate statements. If it is, say so and explain the plan.
Running two businesses and not sure which should apply? Send a quick enquiry and outline both. A real person will tell you how a lender is likely to see the pair.
How do you present two businesses in one application?
Make it easy for the lender to see each business clearly and how they connect:
- Name the borrower and say what the money is for.
- Give each business’s turnover separately, for the same period.
- Send the borrower’s full bank statements, and be ready to send the other business’s too if asked.
- List the other business’s debts, including any you’ve guaranteed.
- Explain regular transfers between the two in a few lines.
- Note any tax debt and whether it’s on a plan.
A short summary at the top, something like “I own two businesses: X (applying) and Y. Y pays X monthly for shared staff. Y has a vehicle loan and no tax debt”, answers most of a lender’s questions before they’re asked.
A worked example
Illustrative. An owner runs a bakery through one company and, for the past year, a wholesale bread business through a second company. The bakery is established with steady daily takings; the wholesale arm is growing but still lumpy. The owner wants $80k unsecured for the bakery to replace an oven and refresh the shop.
The bakery’s statements show regular large transfers to the wholesale company. Unexplained, those look like money leaking out, and the bakery’s free cash looks thin. With a note, the picture changes: the wholesale business uses the bakery’s ovens overnight and pays a monthly fee, while the bakery has lent it $25k in start-up costs that’s being repaid monthly.
The owner sends both companies’ statements, a list of debts (a vehicle loan in the wholesale company, nothing else), and confirms both are up to date with the ATO. The lender sizes the loan on the bakery’s own trading, treats the wholesale business as part of the owner’s guarantor position, and sees no reason for concern.
Two businesses, one clear picture: see what’s possible
Running more than one business shows ambition and energy, and lenders can work with it, as long as they can see how the pieces fit. That’s exactly what we help owners lay out. Unsecured and cash-flow options typically run from $5k to $500k, sized on the borrowing business’s own turnover.
Starting takes about a minute, with no credit check at the enquiry stage, and your details stay with us rather than being handed to multiple lenders at once, so strangers won’t be chasing you. One of our team reads about both businesses, then phones to talk through which one should apply and how to set it out. Give us accurate figures for the business that’s borrowing, plus a line on the other one, and we’ll get the match right sooner.
If it turns out the timing isn’t right for one business, we’ll tell you that too, and what would change the answer. Sometimes the best outcome of a first call is a clear plan for the next three months.
Frequently asked questions
Can I borrow in one business to fund the other?
Sometimes, but it's harder to assess, because the business repaying the loan isn't the one using the money. Lenders will want to understand why, and whether the borrowing business can carry the repayments on its own trading. It's usually cleaner for the business that needs the money to borrow it.
Will a lender add the turnover of both businesses together?
Not usually for an unsecured loan to one entity. The loan is sized on the borrower's own turnover and repayment capacity. The other business comes into it mainly as part of your overall position as guarantor, not as extra income for the borrower.
My other business owes the ATO. Will that stop me borrowing for this one?
Not automatically. ATO debt is considered case by case. Expect the lender to ask about it, because as guarantor your overall position matters, and a debt in one business can put pressure on the other. Being upfront, and showing a payment plan if there is one, helps.
Do both businesses need separate bank accounts?
If either is a company, partnership or trust, yes, it must have its own account for tax purposes. Even if both are run by you as a sole trader, keeping their banking separate makes each one far easier for a lender to assess.
Should I disclose my other business if the lender doesn't ask?
Yes. Most applications ask about other business interests and debts, and it tends to surface through your credit file, your statements or a guarantee search anyway. Disclosing it up front, with a one-line summary, builds trust and avoids delays later.