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Commercial Financing

Commercial Financing: directory of firms

Commercial financing is the decision, not the broker. Before you compare lenders you have to settle what kind of money the business actually needs: money you repay, or money you sell a share of the business for. business.gov.au splits it exactly that way, into debt finance and equity finance, and the choice shapes everything downstream.

Browse commercial lenders by city, and see what to check before you hire.

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Debt keeps ownership intact and creates an obligation. Equity brings in an investor who shares the upside and the decisions. Most Australian small businesses use debt, and most of the trouble comes from matching the wrong debt product to the need: an overdraft used to buy plant, a term loan used to cover a seasonal dip, a facility secured over the family home when an unsecured one would have done.

There is also a timing question. Funding sought to start a business, to grow one, and to survive a bad year are three different conversations, and the last one is usually better begun with a financial counsellor or an accountant than with a lender. Free, confidential financial counselling is listed on Moneysmart, and using it early costs nothing.

Debt and equity, and the products inside each

  • Debt finance: term loans, lines of credit, overdrafts, invoice finance, trade finance, hire purchase, chattel mortgage and leasing.
  • Equity finance: private investors such as angel investors, venture capital, and crowdfunding.
  • A hire purchase agreement lets you get an asset and pay it off in instalments with interest, and you own it outright once the repayments are made.
  • A chattel mortgage means you borrow money from a lender in order to own the item from the start.
  • Government grants and programs sit outside both and are worth checking before you take on a repayment obligation.

Working out how much you need, and whether you can carry it

Start with a cash flow statement, which shows the money coming in and going out, or a cash flow forecast if the business is new. From that, work out the maximum repayment you can afford, whether you need the full amount upfront or want to draw on it only when required, what assets you can offer as collateral, and who will guarantee the facility.

Lenders usually want to see the business plan before approving anything, so bring it up to date with current goals and financial information rather than handing over the version written three years ago.

What actually determines the cost of a facility

  • The interest rate, and whether it is fixed for the full term or variable.
  • Set-up costs and ongoing fees, which vary far more between lenders than rates do.
  • The loan term, since a longer term lowers each repayment and raises the total interest paid.
  • Whether security is required, and what that security costs you in flexibility.
  • A balloon or residual payment at the end, which lowers ongoing repayments but leaves a lump sum to plan for.
  • Minimum and maximum amounts, and any restrictions or conditions attached to the facility.

Security, guarantees, and what is genuinely at risk

A secured facility is backed by collateral: property, inventory, or the asset being purchased. If you do not repay, the lender can take the security to cover its losses. An unsecured facility does not put a specific asset at risk, so the lender assesses the financial health of the business more closely instead.

Directors' and personal guarantees are the part borrowers most often skim. A guarantee can put personal assets behind a company debt, and it may survive changes to the facility. Before signing one, get independent advice about what it covers, how it ends, and what happens if the business is sold.

Where a dispute about a business facility can be heard

AFCA can consider complaints about business finance used for a small business, including loans, commercial bills, hire purchase, leases, letters of credit, lines of credit and overdrafts, and about business transaction and foreign currency accounts. The service is free and its determinations bind the firm once accepted.

Two limits shape this. AFCA defines a small business as one with fewer than 100 employees, counting the whole group of related companies, and it cannot consider a complaint about a small business credit facility exceeding 6.3 million Australian dollars for complaints lodged on or after 1 January 2024.

Funding scams aimed at businesses

business.gov.au warns about funding scams directly, and the pattern is consistent: an approach you did not initiate, about money you did not ask for, with pressure to move quickly. A genuine lender does not tell you that you have already been approved for a loan you never applied for.

Before sending financial records or paying any upfront fee, search the company name or ABN on ASIC's register and check ASIC's list of companies you should not deal with. Report the approach to Scamwatch if it does not hold up.

Reviewing facilities once they are in place

  • Diary the expiry or review date of every revolving facility, because overdrafts and lines of credit are usually reviewed annually rather than set and forgotten.
  • Watch the drawn balance on a line of credit: you pay interest on what you have drawn, not the limit, so an unmanaged balance quietly becomes a term debt.
  • Recheck fixed rates before they roll off, rather than after.
  • Revisit whether security given years ago is still proportionate to the balance outstanding.
  • If repayments are becoming difficult, raise financial hardship with the lender early; AFCA can consider hardship complaints and can vary a credit contract as a remedy.

Commercial Financing: frequently asked questions

Should I use debt or equity finance?

Debt keeps ownership with you and creates a repayment obligation. Equity brings in investors who share ownership, returns and often decisions. business.gov.au sets out both along with common sources of each. The answer depends on how certain your cash flow is and how much control you want to keep, and an accountant is the right person to work through it with.

What is the difference between hire purchase and a chattel mortgage?

With a hire purchase agreement you get the asset and pay it off in instalments with interest, owning it outright once all repayments are made. With a chattel mortgage you borrow money from a lender in order to own the item from the outset. The two have different tax treatments, so discuss them with a registered tax professional.

Is an overdraft a good way to buy equipment?

No. business.gov.au describes an overdraft as useful for bridging short-term cash flow gaps and says you should not rely on it for capital purchases or long-term financing. Asset purchases are usually better matched to a facility whose term matches the life of the asset.

What is a balloon payment?

A large final payment at the end of a loan or hire purchase agreement. Choosing one reduces your ongoing instalments, but you have to plan for the lump sum when the term ends. Dealer finance on vehicles often includes one, sometimes called a residual payment.

Can AFCA hear a complaint about a business facility?

Yes, if your business has fewer than 100 employees and the facility does not exceed 6.3 million Australian dollars for complaints lodged on or after 1 January 2024. AFCA can consider loans, leases, lines of credit, overdrafts, commercial bills and business banking accounts, and its determinations bind the firm once you accept them.

Sources

  1. business.gov.au - Choose your funding
  2. business.gov.au - Apply for a business loan
  3. AFCA - Information for small business
  4. AFCA - Outcomes AFCA provides
  5. ASIC's Moneysmart - Financial advice

Written by the LokalMatch editorial team. Last reviewed 22 September 2026. How we write and check our guides

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What affects the fees commercial lenders charge

Fees depend on the work involved and how the professional bills. We only publish fee ranges when they’re backed by real LokalMatch data or reliable sources. Until then, here’s what usually changes the fee:

  • Scope and complexity of the work
  • How the professional bills: hourly, flat fee or retainer
  • Experience and seniority of the person doing the work
  • Deadlines and how urgent the work is
  • Third-party costs such as filing, registration or government fees

How to compare commercial lenders before you hire

  • Check that they are licensed or registered for this work where you live, on the regulator’s public register.
  • Look for experience with matters like yours, and ask who will actually handle your file.
  • Ask how they charge before any work starts, and get the terms in writing.
  • Compare two or three professionals before you decide.
  • Be wary of anyone who guarantees a particular outcome.

Questions to ask commercial lenders before you hire

  • Are you licensed or registered for this work, and with which body?
  • Have you handled matters like mine before?
  • Who will do the work, and who will I deal with day to day?
  • How do you charge: hourly, a flat fee or a retainer?
  • What is included in your fee, and what costs extra?
  • Will you confirm the scope and fees in a written engagement letter?
  • Do you carry professional liability insurance?

Licences and registration

This kind of work is often limited to licensed or registered professionals, and the rules depend on where you are. Ask which body they’re registered with, and check their status on that body’s public register before you hire.

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