Non-bank business lenders: what to check first

Non-bank lenders now provide a large share of small business finance in Australia, and many are excellent. Quality still varies, though, and business loans carry fewer automatic protections than consumer loans. A few questions before you sign protect you from most problems.

Why business loans are different

Credit used mainly for business purposes generally falls outside the National Credit Code. That is why business loans do not carry the standard cost disclosures you see on home and personal loans, and why the contract terms deserve close reading. It also means the total cost in dollars is the fairest way to compare offers.

The checklist

Question	Why it matters
Who exactly is the lender?	Know the legal entity you are contracting with
What is the total amount repayable?	The real cost, beyond any headline figure
What fees apply, and when?	Establishment, line, dishonour, default, discharge
Can I repay early, and what does it cost?	Some loans charge the full cost regardless
What security is taken?	Property, equipment, a general security interest
Who must guarantee?	Directors, owners, sometimes spouses
What counts as a default?	Missed repayments, other triggers
How are complaints handled?	Internal process and any external options

Not sure this fits your business? That is exactly what the quick enquiry is for. One team reads it, no credit check runs, and nothing is sold on.

Read the default clauses

Default clauses explain what happens if something goes wrong. Look for:

• How many days late a repayment can be before it is a default.
• Whether default interest or fees apply.
• Other events that can trigger default, such as changes in ownership or other debts.
• What the lender can do after a default.

Guarantees and security

Most business loans need personal guarantees, and secured loans register security over property or assets. Make sure you know exactly what is being secured and who is guaranteeing. Our guide to personal guarantees explains what you are agreeing to.

Red flags

• Pressure to sign quickly without seeing the full contract.
• Reluctance to state the total amount repayable.
• Fees that appear only after approval.
• Requests for upfront payments before the loan is approved.

Comparing offers

Use the total cost in dollars, the repayment schedule and the flexibility of the terms. Our guides to comparing quotes, loan fees and total cost of finance go into the detail.

Where to get help

Moneysmart has general information on credit and loans, and the Australian Small Business and Family Enterprise Ombudsman provides information and support for small businesses dealing with disputes.

Take your time on the contract

A good lender will give you time to read the loan documents and ask questions. If you are rushed, or answers to simple questions are vague, treat that as information about how the relationship will run. For larger amounts or where property and guarantees are involved, ask your accountant or lawyer to review the documents before you sign.

Where to go from here

• Bank vs non-bank business lenders: Bank vs non-bank business lenders: how assessment, speed, security, flexibility and cost differ, and when a non-bank lender makes sense for your business.
• How to compare business loan quotes: How to compare business loan quotes when lenders present costs differently: total repayable, cost per dollar, fees, flexibility and early repayment terms.
• Business loan fees to ask about: The business loan fees that are easy to miss: establishment, line, account, dishonour, default, early repayment and discharge fees, and how to compare them.
• Personal guarantees on business loans: What a personal guarantee on a business loan means, who gives them, what is at risk, how they end and what to check before you sign one.
• Total cost of finance, explained: Total cost of finance is everything you repay above what you receive. How to calculate it from any quote and use it to judge whether a loan is worth it.

Words worth knowing

• Personal guarantee: a promise by a director or owner to repay a business debt if the business does not.
• Total cost of finance: the dollar gap between the cash that reaches your account and everything you hand back over the life of the loan, fees included.

Five things to confirm with any lender

• How much lands in my account after any fees are deducted?
• What is the total repayable, and over what period?
• Is the repayment schedule weekly, fortnightly or monthly?
• What property or assets will be secured?
• What are my options if trading dips during the term?

Where your accountant fits in

Your accountant knows your numbers better than anyone, so involve them early. They can confirm figures for the enquiry, flag tax effects of different structures, and tell you whether the timing of a loan suits your BAS and tax cycle. A lender’s job is to assess whether funding fits; your accountant’s job is to make sure the business is set up to carry it well. The two work best together.

Quick recap

• Confirm who the lender is
• Get the total cost in writing
• Check early repayment, line and default fees
• Understand security, guarantees and default terms

How Capital At Call handles it

We keep it simple. Your enquiry goes to one team. That team calls you, confirms the details, asks for bank statements or property details and tells you honestly what looks achievable. If the right answer is a payment plan, a conversation with a supplier or waiting a quarter, we will say so. If funding fits, you get the amount, term, repayments and total cost spelled out before you sign anything. You will always know who is handling your file and how to reach them.

Is funding the right answer here?

Not every cash problem is a funding problem. Sometimes the better fix is a conversation with a supplier, a payment plan with the ATO, chasing an overdue invoice or adjusting prices. Funding earns its place when it solves a timing gap or unlocks an opportunity worth more than its cost. We will tell you honestly which situation you are in.

Paperwork worth gathering

A short checklist before you send the enquiry. None of it takes long, and together it heads off the most common causes of delay:

• Know the amount you need and what it will pay for.
• Check your recent bank statements so nothing in them surprises you.
• Note any loans, leases or payment plans the business is carrying.
• If you own property, know who is on the title and what is owed.
• Make sure every director or co-owner knows you are applying.

Getting the enquiry right

Every question on the form is there for a reason: it changes which funding fits. Describe the business as it stands today rather than the version you expect in six months. Mention any default, tax debt or recent decline in the notes. We look at those situations all the time, and knowing early lets us head straight for options that can actually work.

See what you could qualify for

Ready when you are. Send your enquiry and a real person will review it and call you back. There is no credit check to enquire and no selling of your details. The only thing we ask is accuracy: tell us what you really need, what the business really turns over and how your credit really looks, so the first match is the right match.