Business Loan Brokers: directory of firms

Ask the question at the first conversation: do you charge me, or does the lender pay you, or both. If the lender pays, ask whether the commission differs between lenders on the panel, because a difference creates a pull that nothing in the law is stopping.

Then look at the facility itself rather than the headline rate. business.gov.au suggests comparing upfront and ongoing charges, whether the rate is fixed or variable, minimum and maximum loan amounts, available term lengths, whether security is required, and any other restrictions or conditions. Short-term unsecured business lending can carry costs that a monthly repayment figure hides entirely.

Responsible lending obligations under the National Consumer Credit Protection Act do not extend to small business lending, and AFCA does not apply them when assessing a small business loan complaint. A small business lender is not required to make the same level of inquiries as a consumer lender.

What does apply is the general conduct law. AFCA assesses these complaints against statutory provisions including the implied warranty in the ASIC Act that a service will be provided with due care and skill, and the prohibitions on misleading and unconscionable conduct. Keep the emails. If a broker told you something the contract does not say, that record is the whole case.

Work out your position first: income, expenses, debts and cash flow, the maximum repayment you can afford, whether you need the money upfront or want to draw on it as required, what assets you can offer as security, and who would guarantee the facility. A broker with that in hand can approach lenders properly instead of scattering applications.

Lenders commonly ask for proof of identity, the business plan, financial reports including cash flow statements, financial forecasts, lease agreements and your personal financial information. Multiple applications lodged in a short window can also leave a trail on your credit file, so agree with the broker how many lenders they will actually approach.

Your existing bank may discount for an existing relationship, and it already sees your transaction history, which can shorten the assessment. But business.gov.au is clear that it is worth checking loans from non-bank lenders as well as traditional banks, because the cheaper or more flexible option is often outside the bank you already use.

A broker panel is wider than one bank and narrower than the market. Ask which lenders are on the panel, which are not, and why. If the broker cannot access a lender you are interested in, you can approach that lender yourself in parallel.

Complain to the firm in writing first. If it is unresolved, AFCA can consider complaints about business finance used for your small business, including credit cards, loans, commercial bills, hire purchase, leases, letters of credit, lines of credit and overdrafts.

AFCA's service is free, its determinations bind the financial firm once you accept them, and if a firm does not comply AFCA must report it to ASIC. Compensation for indirect financial loss and for non-financial loss is each capped at 6,300 Australian dollars per claim for complaints lodged on or after 1 January 2024, with separate rules for direct loss.