Business Loan Broker

Find out what a business loan broker is and what they do right here in this comprehensive guide.

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, updated on September 21st, 2023       

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What is a business loan broker?

A business loan broker performs the same function a mortgage broker does for homebuyers: they help prospective borrowers find the best business loan deal suited to them. They can do this by drawing from a range of established partnerships with lenders, relationships which place them in a position to better understand the requirements of each of their lenders and match them to your business’ individual situation more accurately.

They also help you navigate the application process, acting as a middle person between you and your lender. The application process for business loans in Australia, particularly for larger amounts, can often be a long and arduous one. With the potential for several back-and-forths with your lender, business finance brokers are there to minimise the correspondence between the two parties and ensure your overall application meets the mark.

What are the benefits of going with a business loan broker in Australia?

There are several key benefits to pursuing a business loan in Australia through a commercial finance broker. Some of the most notable of these are:

Having the hard work done for you

One of the most appealing traits a finance broker can offer a business is the amount of work they do behind the scenes. They compare the offers themselves and speak to the lenders on their panel directly to find a loan that suits your wants and needs. They’ll consider your preferences, such as if you’re looking for a loan with free additional repayments or one with a particularly low interest rate. It can sometimes be complicated to do your own research and consume time you simply don’t have while running your business, so having an expert do it for you can be a major boost and save you much-needed time.

Accessing great deals unavailable to direct applicants

Perhaps the factor which wins the most business owners over is their commercial loan broker’s ability to negotiate a better deal with a lender than they could on their own. With an established relationship, they’re best placed to negotiate on interest rates, features and other loan conditions in line with the deal you’re looking for. Brokers with wider panels of lenders are generally the best when it comes to finding especially low rates and comparing, as they have a larger sample size to choose from. With them in your corner, you could save more on interest and fees overall.

Ensuring your application meets lender requirements

Crucially, though, your broker will know your lender’s eligibility requirements inside and out. They’ll understand what’s required and the particular documents you’ll need to submit to qualify for your loan. Most importantly, they can conduct their own borrowing power check and let you know whether the amount you’re looking for is more or less than what your lender can provide. There are many business finance brokers who can accommodate businesses who’ve struggled with their credit scores and are able to get a deal with a specialist lender who works with borrowers in this position.

Are there any alternatives for finding my business loan?

Yes – the clearest and most obvious alternative for businesses looking to take out a loan is to compare them yourself. Fortunately, you can save on the hassle of navigating multiple lender sites and spending hours researching offers by comparing business loans right here with Savvy.

We make it easy for anyone to find and compare a range of deals by simply listing offers from our panel of reputable business financiers and breaking them down in a simple-to-read format. Contrast business loans based on their interest rates, fees, borrowing range, available terms, eligibility criteria and more with our rate table above.

By completing this process yourself, you ultimately have the most say and control over which lender you end up going with. Some brokers can be limited by the lenders they’re partnered with, meaning you’re not always going to gain access to as wide a selection as you might think.

Frequently asked questions about business loans and brokers

Does my broker have to be in my city or town?

No – you can find, chat to and engage the work of commercial loan brokers 100% online. There isn’t any need for you to meet your broker in person at any stage of the process, as they can draw from online lenders and loans and walk you through each step of the way over the phone or via email and secure online portals. By searching for them online, you open yourself up to a wider range of potential brokers who can help you find the right loan.

Do I need to provide loan security?

No – we work with business loan financiers who can approve small business loans without having any assets listed as collateral. However, these loans can be taken out by businesses of all shapes and sizes, as they’re the fastest to process and most widely available for businesses and owners who don’t have eligible assets to use as collateral (or simply prefer not to). Secured loans are also available, which can open you up to a lower interest rate and increase your borrowing range significantly.

How much can I borrow on my business loan?

This will depend on a variety of factors. Although unsecured business loans allow for amounts ranging from $5,000 to a maximum of $500,000 (a range which varies between lenders), how much you can borrow will ultimately come down to your business. Your monthly revenue and expenses will play a major role in determining what you can take on, as will your credit score, assets and liabilities and the type of loan you choose (secured loans allow you to borrow up to and above $1 million in most cases). Gain an idea of what different loan sizes might cost you by utilising Savvy's business loan repayment calculator.

What can I use my business loan funds for?

You can really use your loan for whatever business purpose you like. Whether you need it to purchase inventory, fit out your shop or even purchase another business or franchise, you can make it happen with a business loan. Alternatively, if your business has numerous debts on its plate and you're looking to make them more easily manageable, you can take out a business loan to consolidate those debts

Which documents will I need as part of my business loan application?

The specific documents you’ll need will depend on your lender and the size of the loan you take out, but you’ll need to supply the following:

  • Your ABN/ACN and GST registration
  • Your business’ bank statements
  • Your driver’s licence or passport
  • Record of expenses such as rent
  • Business financials for larger loans (typically $250,000+) such as profit and loss statements, tax returns, accounts receivable and payable, assets and a business plan projecting revenue
Do I need to pay a deposit?

No – when it comes to how much of a deposit you need, the answer really lies with you. Reducing your loan amount and using some of your business’ funds can end up saving you a meaningful amount on interest and fees and potentially shorten your loan term. However, if you don’t wish to, your loan can finance up to and over 100% of whatever expense needs covering.

Will I have to pay my broker if they don’t find a deal for me?

Probably not – in most cases, your commercial finance broker won’t charge a fee in the unlikely event they can’t find a loan for you.

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