Commercial Mortgage Brokers: directory of firms

ASIC's guidance on whether a credit licence is needed turns first on whether the credit is of a kind the National Credit Code applies to. Business-purpose lending generally is not, which is why a broker may hold a credit licence for their consumer work and still arrange commercial facilities that fall outside it.

The practical consequence is that the safeguards a borrower is used to from a home loan, the suitability assessment, the verification of income, the broker's statutory best interests duty, may not be engaged. Ask the broker, in writing, which obligations they consider apply to your transaction and why.

AFCA can consider complaints from a small business, which it defines as an organisation with fewer than 100 employees, counting the whole group if the business is part of one. Registered charities are covered regardless of size.

There is a hard ceiling on facility size. AFCA 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. A credit facility can be a loan, lease, line of credit, guarantee or other debt instrument, or a combination approved under the same contract, and the exclusion applies whether you are the borrower or the guarantor. Above that line, the courts are the forum.

Commercial broking is less standardised than home loan broking. Some brokers are paid a commission by the lender, some charge the borrower a fee for arranging and structuring the facility, and some do both on the same transaction. None of that is improper, but all of it should be disclosed before you engage.

Ask for the remuneration arrangement in writing, ask whether it varies between the lenders on the panel, and ask what happens to the fee if the deal does not settle. On larger or more complex structures, also ask what the broker is doing for an ongoing payment, if there is one.

A secured facility is backed by collateral, and if you do not repay, the lender can take the security to cover its losses. Where you are borrowing to buy an asset, that asset is often the security. An unsecured facility puts no specific asset at risk, so the lender looks harder at the financial health of the business instead.

Property finance is normally a term facility, but working capital around it may be better served by a line of credit or an overdraft. business.gov.au is blunt that an overdraft is useful for bridging short-term cash flow gaps and should not be relied on for capital purchases or long-term financing. A good commercial broker will separate the two rather than bundling everything into the mortgage.