Business Loan Brokers: Your Complete Australian Guide

Working with a business loan brokers gives you access to multiple lenders and expert guidance - at no cost to you.

What Does a Broker Do?

A mortgage or finance broker:

• Assesses your situation and borrowing capacity
• Compares options from their lender panel (often 30-60+ lenders)
• Recommends suitable products for your needs
• Handles paperwork and lender communications
• Negotiates on your behalf
• Provides ongoing support throughout the loan term

Broker vs Direct to Bank

How Brokers Get Paid

Brokers are paid by the lender you choose, not by you. This typically includes:

• Upfront commission: 0.5-0.7% of loan amount (paid at settlement)
• Trail commission: 0.15-0.20% annually while loan is active

By law, brokers must act in your best interests, not just recommend whoever pays them most.

Business Finance Options in Australia

Australian businesses have access to diverse funding options, from traditional bank loans to alternative lenders and government-backed programs. The right choice depends on your business stage, funding needs, and how quickly you need the money.

Banks offer the lowest rates but have strict requirements. Alternative lenders provide faster approval with less documentation but charge higher rates. Many businesses use a mix of funding sources for different purposes.

Types of Business Finance

What Lenders Require

• Trading history - Most want 6-24 months; some alternative lenders accept 3 months
• Annual revenue - Minimum thresholds vary ($50K - $500K+ depending on product)
• BAS statements - Usually last 4-6 quarters
• Bank statements - 3-6 months of business account history
• Financial statements - Banks want accountant-prepared financials; alternatives may accept management accounts
• Business plan - Required for larger loans or startups
• Personal guarantee - Directors typically guarantee business loans
• Security - Property or equipment security reduces rates

Government Support Programs

Australian governments offer several programs to support small business lending:

1. SME Guarantee Scheme - Government guarantees 50% of eligible loans up to $5M, making approval easier
2. Export Finance Australia - Supports businesses involved in export activities
3. State-based programs - Various grants and concessional loans by state (check business.gov.au)
4. R&D Tax Incentive - Tax offsets for eligible research and development activities
5. Instant Asset Write-off - Immediate deduction for eligible business assets

A broker or accountant can help identify programs your business may qualify for.

Choosing the Right Business Finance

Match your finance type to your specific needs:

Preparing a Strong Application

Increase your approval chances with proper preparation:

1. Organise financials - BAS statements, bank statements, profit & loss, balance sheet
2. Show consistent revenue - Steady or growing income is more attractive than volatile
3. Explain your business - Lenders assess industry risk; help them understand yours
4. Document loan purpose - Clear explanation of how funds will be used and benefit the business
5. Address any issues - Explain any past problems, show how they're resolved
6. Personal financial position - Directors' personal credit and assets often factor in

Tax Considerations for Business Finance

Business finance has tax implications worth discussing with your accountant:

• Interest deductibility - Interest on business loans is generally tax deductible
• Chattel mortgage - May allow GST claim on purchase, interest deductible, depreciation benefits
• Hire purchase - Depreciation on asset, interest component deductible
• Operating lease - Entire payment potentially deductible as operating expense
• Instant asset write-off - Eligible assets may be fully deductible in purchase year

The best structure depends on your business situation, cash flow, and tax position. Professional advice is recommended.

Why Compare Multiple Options

The Australian lending market is competitive, with significant variation between lenders in rates, fees, criteria, and service levels. What one lender declines, another may approve at competitive rates. This is why comparison is essential:

• Rate differences - Even 0.5% difference saves thousands over a loan term
• Fee structures - Some lenders charge high fees but lower rates, others the reverse
• Approval criteria - Each lender has different risk appetites and policies
• Processing times - Range from same-day to several weeks depending on lender
• Service quality - Support levels vary; read reviews before committing

A finance broker simplifies this by accessing multiple lenders through one application, matching your situation to appropriate options, and handling paperwork on your behalf—at no cost to you since brokers are paid by lenders.

Ready to Take the Next Step?

Finding the right finance option doesn't have to be complicated. At Esteb and Co, we help Australians compare options across 83+ lenders to find solutions that match their situation—whether that's perfect credit or a more complex history.

Our process is simple:

1. Quick online form - Tell us about your situation (2 minutes, no credit check)
2. Personalised options - We match you with suitable lenders from our panel
3. Expert guidance - Our team explains your options and handles the application
4. Ongoing support - We're here throughout the process and beyond

Whether you're ready to apply or just exploring your options, there's no obligation and no impact on your credit score to get started.