Want to make sure you borrow from a legitimate business lender?
There is a range of business lenders available online offering various business finance products. If you're looking to apply for a loan, you might feel overwhelmed by your choice, but also wary of finding a lender that won't charge exorbitant rates or scam you. There are things you can do to ensure you're dealing with legitimate business lenders; find out what in this guide.
How to check whether a lender is legitimate
Not sure whether or not everything is on the up and up? Go through this checklist to weed out unscrupulous offers.
- Are they easily contactable? If you can’t find any contact information for the lender, then don’t trust that you’ll be able to get in touch with them if something goes wrong.
- Did you call their phone number? They should always have a publicly listed phone number. Call it to confirm that it’s a real number and that it’s their actual business number. Walk away if anything doesn’t add up.
- Have you checked their license? You should know the name of the business you’re dealing with. Check it against the ASIC list of unlicensed companies and make sure they are not on that list. If you don’t find them there, check the ASIC professional register and make sure they are on that list. If you can’t find them on either of those then they’re unknown and unlicensed, and you should avoid doing business with them.
Business lenders you can compare
How to know if a broker is legitimate
Brokers are agents that can help you find the right loan and make negotiations with the lender. They can be a good way to save time, money and effort, and they can help take the legwork out of comparing loans. The catch is that you need to be able to trust them.
Brokers are paid a commission by the lenders for matching customers with products. It means that you often don’t have to pay anything for their services, but also that they may have an incentive to steer you towards bigger and more costly financing. Make sure your broker is right for you by looking at:
- Additional fees. If the broker charges fees, they should generally be token expenses rather than another significant cost. The bulk of their income will typically come from commissions, unless they are providing specific additional services. Ask for a breakdown of all costs before going ahead and don’t commit to any fees without knowing exactly what they’re for.
- Contactability. A broker needs to be responsive and communicative because they’ll be your business loan go-to. If the broker is difficult to contact, doesn’t provide at least one phone number or is generally unresponsive, find another.
- Specialties. A broker might want to earn more commission by straying outside their area of expertise, but it’s not necessarily in your best interests to go along with it.
- References. Check your broker’s references to see what past customers are saying about them. Your broker should be happy to provide these, and you can also find testimonials online. Avoid going with a broker that has zero references or testimonials, or any broker that isn’t happy to share their customer feedback.
- Check their license. Confirm that your broker is licensed with ASIC by entering their name or their business’s name into the professional register, or phone the ASIC infoline on 1300 300 630. Never use an unlicensed broker. All brokers are required to have a license and practising without one is illegal.
Where to find trustworthy lenders and brokers
You can find many legitimate lenders without needing to go too far. For small- to medium-sized enterprise (SME) loans outside of the banks that you know you can trust, compare the providers below.
| Lender | Australian phone number | Physical address | Learn more |
|---|---|---|---|
| Banjo Loans | 1300 226 565 | 468 St Kilda Rd, Melbourne, VIC 3004 | More |
| Capify | 1300 760 930 | 3/10 Phillip St, Sydney, NSW 2150 | More |
| Max Funding | 1300 411 411 | 377 Kent St, Sydney, NSW 2000 | More |
| Moula | 1300 885 893 | 15/535 Bourke St, Melbourne, VIC 3000 | More |
| GetCapital | 1300 249 649 | 119 Alexander St, Crows Nest, NSW 2065 | More |
| Prospa | 1300 882 867 | 2/4-16 Yurong St, Sydney, NSW 2000 | More |
| OnDeck | 1800 676 652 | 1400 Broadway, New York, NY 10018, United States | More |
| Spotcap | 1800 107 010 | 2/50 Bridge St, Sydney, NSW 2000 | More |
Picture: Shutterstock
