How a business loan broker works
No upfront fees, paid by the lender at settlement, and not always the answer. Here’s what a broker does, and when going direct is the better call.
General information only
A business loan broker works with dozens of lenders at once, matches your business to the ones funding deals like yours right now, and manages the application on your behalf. You don’t pay for it. The lender does, and only once your loan settles.
That’s the mechanics. The real value is somewhere else: there is so much choice in the lending market now that going direct often means picking a product without ever finding out what else was on the table.
Why not just go directly to a lender?
Choice is the problem, not the solution. With 80-plus non-bank lenders active in the SME space alone, plus every major bank, a business owner comparing offers on their own is working from a handful of quotes when dozens of better-fitting ones exist. A broker’s job is knowing what each lender is funding right now, not what their website says they fund.
- 01Lender appetite shifts constantly, by industry, by loan size, by how a business’s bank statements read. A product that was competitive six months ago might not be the best fit today, and a business owner researching once has no way to know that.
- 02Going direct to one or two lenders means comparing against yourself, not the market. You can still make a reasonable decision. You just can’t know if it was the right one.
How much do lender rates differ?
Enough that the question answers itself, and the spread is visible without asking anyone. These are the published rates on six banks’ own business overdraft pages, for broadly comparable small business facilities:
| Lender | Published rate | What they actually disclose |
|---|---|---|
| Westpac | From 8.11% p.a. | Rate plus a 1.20% line fee |
| CommBank (secured) | From 8.75% p.a. | Rate plus a 1.70% line fee |
| CommBank (unsecured) | From 14.80% p.a. | Rate plus a 1.70% line fee |
| Great Southern Bank | 11.70% to 21.70% p.a. | A range rather than a rate |
| ANZ | Not published | Fee only |
| Suncorp Bank | Not published | Fee only |
| NAB | Not published | Nothing |
Two things fall out of that table, and neither is an opinion. The published rates run from 8.11% to 21.70%: 13.59 percentage points of spread, or roughly two and a half times, for a facility most owners would describe the same way. And three of the six banks publish no rate at all, so half the sample can’t be compared without applying.
That’s the case for using a broker, and it’s a structural argument, not a sales one. You can’t compare what isn’t published, and applying to each lender to find out leaves a credit enquiry behind every time. It’s also why the size of the panel matters less than knowing which lender reads your file well. The spread above is the range of published starting points, not the range you’d be quoted.
The RBA’s business lending series shows the same gap from the other direction. In July 2026 small business paid 7.46% p.a. on loans outstanding while large business paid 5.74%, a 172 basis point penalty for being small, before anything about your own trading is considered. Offering property as security closes some of it: residentially secured small business lending sat at 6.98%, 48 points below the small business average.
Rates as published on each lender’s own product pages, September 2026, and the RBA business lending series for July 2026. Published starting rates aren’t quotes. The rate you’re offered depends on your file.
Does a broker always steer you away from your bank?
No. If your existing bank has given you a good offer, or the bank is the right fit for your situation, we’ll tell you to take it. The job is finding the right outcome for your business, not proving the broker channel was necessary.
For almost every application, we’re only paid by the lender once your loan settles. There’s no upfront fee for the research, the comparisons or the application.
How does a business loan broker get paid?
By the lender, after your loan settles. The lender pays a commission for bringing them a completed, credit-ready application, and like the lender’s other costs, it’s part of how the loan is priced. There’s no upfront fee to enquire or apply, and if your application doesn’t settle, there’s no fee either way.
| Cost to you | No upfront fees to enquire or apply. Commission paid by the lender at settlement |
| If it doesn’t settle | No fee, to you or from the lender |
| After settlement | Ongoing service included, not a one-off transaction |
| Access | Whatever mix of banks and non-bank lenders actually suits the deal |
Upfront, trail, and why the difference matters to you
Lender commission usually comes in two parts. An upfront payment when the loan settles, calculated as a percentage of the amount funded, and in some products a smaller trail paid periodically while the facility stays open. Not every product pays both, and plenty of commercial facilities pay upfront only.
Here’s the part to be direct about: the rate isn’t the same from every lender. Two lenders who would both approve you can pay a broker materially different commission, which means there is a real conflict of interest built into how this industry is paid. Pretending otherwise would be dishonest.
What protects you is the comparison itself. Ask to see each option side by side, rate, fees, term and total repayments, and why one has been recommended over another. The reason should be about your business, not the broker’s.
We don’t publish a commission percentage. It varies by lender, product and loan size, so any single number here would be a marketing figure rather than a true one.
One exception, and it’s rare. Very large deals funded by private lenders, such as family funds or overseas private capital, can take days or weeks to source. On those, we may charge a fee to process the application, and we agree it with you before any work starts.
What happens after settlement?
The relationship doesn’t end when the loan does. Think of your broker as a sounding board for what the market is doing. Rates move, new lenders enter, your business’s position changes. You can check in on any of that without starting a new search from scratch.
What makes one broker different from another
Lender-side experience, not just access
Most brokers can technically submit to 50-plus lenders. Fewer have worked inside them. Years spent on the lender side, across multiple businesses, building the relationships and the credit-policy knowledge, changes what “matching you to the right lender” means.
Knowing what lenders are buying, not just what they list
A lender’s published criteria and what their credit team is approving this month are two different things. In-depth, current relationships are what closes that gap, and it’s the difference between a broker who submits applications and one who places them correctly the first time.
Why does size change how a lender reads your business?
Because survival rises with size, steadily and without exception. Of the businesses operating in June 2022, 55.3% of non-employing businesses were still trading four years later, against 89.3% of those with 200 or more staff. Every step up the scale survives better than the one below it.
| Employment size, June 2022 | Businesses | Still trading June 2026 |
|---|---|---|
| Non-employing | 1,521,428 | 55.3% |
| 1 to 4 employees | 727,457 | 68.6% |
| 5 to 19 employees | 226,968 | 77.9% |
| 20 to 199 employees | 59,338 | 85.1% |
| 200 or more employees | 4,533 | 89.3% |
| All businesses | 2,539,724 | 61.9% |
Source: ABS Counts of Australian Businesses, business survival by employment size, June 2022 to June 2026. Size is measured at the start of the window, so a business that grew or shrank over the four years stays in its starting band.
The same data split by legal structure looks like a second finding. It isn’t. Sole proprietors survived four years at 48.4% against 66.9% for companies, an 18.5 point gap. But sole proprietors are overwhelmingly non-employing, so that’s the table above from a different angle, not an independent effect.
We mention it because the comparison gets misused. Nothing in this data says incorporating would improve your odds, and anyone telling you otherwise is reading a correlation as a cause. Your structure is a question for your accountant, on tax and liability grounds. What it does affect is how a credit team reads the file, which is our end of it.
The largest single jump is the first one. Taking on one employee moves a business from 55.3% to 68.6% survival, 13.3 points, a bigger step than any other on the table. That’s the base rate a credit policy is written against, and it’s why a sole trader and a ten-person business with identical revenue get read differently.
It isn’t a reason to accept a worse deal. It’s the reason a panel matters. Lenders set their own appetite for where on that curve they’ll lend, and the gap between the most and least cautious is wide. Knowing which is which is most of the job.
When doesn’t a broker matter?
If your bank has already offered you a strong, competitive deal and you’re happy with the relationship, there’s often no reason to shop it around through a broker. The value of a broker shows up when there’s real complexity, multiple lenders to weigh up, or a deal that a generic application would get knocked back for. If your situation is simple and your existing offer is fair, say so on the call. We’d rather tell you that than run a comparison that doesn’t change the outcome.
Want a second opinion on your options?
Tell us what you’re financing and what you’ve already been offered, and we’ll tell you honestly whether a broader search is worth it, or whether what you’ve got is already the right deal.
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.