3 Key Reasons Why Commercial Broking Makes Good Business Sense

Commercial lending is popular in Australia because it makes it easier for businesses to grow. However, it can be challenging to figure out what qualifies as good commercial rates and which commercial lenders are most suitable. 

As a business owner or executive, you may be tempted to research and apply for a commercial loan yourself. However, it makes so much sense to build a relationship with an expert who specialises in this area, particularly if you want to know you’re getting the best deal. 

The following explains commercial lending in detail and outlines three reasons why using a specialist commercial expert makes good business sense, regardless of the industry you are in. 

What is commercial lending?

Commercial lending covers any type of loan a business may require. Funds may be needed to buy commercial property, machinery, vehicles, equipment or other assets. Business owners also take out loans so they can employ staff or pay wages, reduce their tax bill, relocate to larger premises or improve cash flow. 

There is a range of commercial lenders in Australia outside of the big four banks. Smaller lenders tend to be more flexible and willing to accommodate startups and businesses with special requirements. They can usually often offer shorter turnaround times than the big banks because of different application response processes and restrictions. 

While a commercial loan is similar to a residential or personal loan in that you borrow money and pay it back, with interest applied to repayments over time, the structure and conditions are often different. There are also different types of commercial loans, such as chattel mortgages, business loans, overdrafts, trade finance, lines of credit, invoice finance and asset loans. 

A commercial loan may only be for a twelve-month period and it may be ‘secured’, which means it is taken out against an existing asset. 

See more: Secured & unsecured business loans.

Commercial rates vary due to the many different lenders and repayment options that exist. 

Commercial lending in 2023

As shared by the Australian Banking Association in a recent report, despite changing economic conditions in Australia, the average value of a commercial loan made between August 2021 and July 2022 grew by 15 per cent per cent for small businesses and 18 per cent for medium businesses compared to those made between August 2020 and July 2021. 

The ABA shared that it expects SMEs to “grow progressively confident”. As businesses expand and employ more people, commercial loans will play an important role. 

Why commercial broking makes good business sense

#1 You will work with an expert 

Every professional is skilled in a few areas across their chosen field to give the best professional advice. However, business owners often find themselves trying to wear many hats, including marketing, sales, customer service and finance. 

While it’s ok to be a generalist, when it comes to complex tasks such as applying for commercial loans, it’s not possible to keep up with the requirements and the rate of change unless you live and breathe the subject. For example; your expert will be able to explain the benefits of redrawing, or let you know the reason why you avoid linking your business loan to a transaction account. 

Lending is highly regulated and scrutinised in Australia and the goalposts shift regularly. When you work with a commercial expert, you will have the benefit of being connected with someone who understands exactly which products are on the market and which commercial lenders are likely to approve your business loan application. Commercial experts also have pre-established relationships with the people who approve business loans; this allows them to fast-track your application if necessary. 

Twenty-four-hour and same-day commercial lending is possible but you need to know who to speak to and what information to supply. As a business owner, you could lose hours trying to figure this out. It’s better to make a phone call to a commercial expert who understands your business and can get to work on your behalf. Often, the price you will pay outside of loan establishment and annual fees is very little. 

As a final word, it’s always best to work with a commercial lending specialist. A standard mortgage or personal loan expert won’t be up to date with the latest information and products, and their relationships with the people who approve commercial loans won’t be as strong. 

#2 You will access the most suitable conditions and commercial lending rates

Commercial loans are by no means created equal in Australia. If you’re not active or experienced in the industry, it’s likely there are many lenders and products you are not even aware of. 

Taking out a business loan that doesn’t meet your needs in the right way can end up costing your business thousands of dollars. Often, a deal that looks too good to be true will come with a high-interest rate or conditions which result in you paying more than you expected to. 

The right commercial lending solutions will be cost-effective for your business and will be structured in a way that makes your life easier. 

You’ll waste hours comparing products and getting bogged down in the fine print if you try to identify the most suitable commercial loan and commercial rates on your own. It’s better to work with an independent expert who has knowledge of a range of products but is not biased towards a specific lender. 

Commercial lending solutions in Australia come with options such as principal and interest or interest only as well as variable/fixed interest rates. Your commercial expert will help you explore the potential of each scenario so you can understand which will be the most suitable and cost-effective. 

#3 You will have long-term support

If you already have commercial lending agreements, a commercial expert can review them to make sure you’re getting the best deal, and can potentially restructure your loans to reduce your repayments. 

Your expert can also act as a go-between for you and your commercial lender if you find yourself running behind schedule in terms of payments. 

When you have a long-term relationship, your expert will stay in touch with your accountant and other financial management professionals. This will allow you to collaborate and identify the best ways to grow your business against your financial situation. 

As a business owner, it shouldn’t be your job to track down and review the best commercial lenders and loans in Australia. Let your expert come to you with updates about the solutions that may work for you. 

Commercial Lending FAQ

Take a look at some commonly asked questions about commercial lending: 

What are the different types of commercial loans?

Work with your commercial expert to discuss the conditions involved with:

• Asset or equipment loans (to help you purchase equipment and other goods)
• Business overdrafts and lines of credit (to help you access extra cash when you need it)
• Invoice finance (to close the gap between your invoices being issued and paid)
• Private loans (which help you to raise capital without going through a bank or lending institution)
• Leasing (which is a hire arrangement that can allow you to always access the most up to date equipment or vehicles) 
• Hire purchase (your lender purchases an asset at your request and your business uses it in return for regular repayments. Once the arrangement is paid in full, the asset belongs to your business)
• Trade finance (help to pay for goods imported from overseas or locally)
• Same day loans (for ultra-fast turnaround)
• Cash flow lending  to help you stay in control of your working capital. 

What criteria will my business have to meet in order to secure a commercial loan?

Commercial lenders review all or some of the following lending criteria: 

• The size of your business
• Your revenue
• How long you have been operating for
• The value of your assets or capital
• Income and liability statements (for full-doc loans)
• Repayment capability
• What the money is needed for (e.g. a shorter term property development loan or to close cash flow gaps)

Why should I work with darkhorsefinancial.com.au?

Now you understand the value of a commercial expert, you need to know who to choose. 

At darkhorsefinancial.com.au, we’re not just commercial finance specialists; we’re business specialists with a clear understanding of what it takes to build a successful venture. We’re here to ensure you get a commercial finance solution that aligns with your business needs and goals. 

Work with a leading commercial expert in Australia

If you need fast access to commercial lending to overall improve your businesses cash flow and want to build a relationship with a reliable commercial expert, darkhorsefinancial.com.au can help. Send us a quick enquiry today.