Non-bank business lenders growing in popularity amongst SMEs


There is no doubt the big banks remain major players in the SME lending market however, there has been a steady rise in the number of non-bank lenders offering fast and flexible lending options in this space. They are able to move much faster than the traditional banker with their unique ‘fintech’ approach, giving small business owners across Australia alternative options when seeking business funding.

Going hand-in-hand with this preference for more flexible finance solutions amongst SMEs is the demand for unsecured lending options. Business owners are demonstrating they understand the need to pay a small premium in return for fast, flexible finance options which do not require them to place the family home up as security.

What is a non-bank lender?

Put simply, a non-bank lender is a financier who is not a bank or credit union. Instead, a non-bank lender will (in most cases) have privately raised funds with which it can lend under the criteria it chooses.

Benefits of non-bank lenders

In addition to offering unsecured options, non-bank lenders typically have far lower application requirements. Instead of being required to provide a full 12-months of financials for your business, along with a vast array of other paperwork, non-bank lenders often only require 3-months of bank statements to verify there is sufficient cashflow to service the requested loan amount. Further, non-bank lenders are less restricted by the regulations that are enforced on the big banks and are often able process, approve and fund loans inside 24-hours.

Drawbacks of using a non-bank lender

Many would say they are drawn to their bank due to the comfort it provides, knowing banks are large institutions backed by the government which are highly regulated. As such, many would perceive the main disadvantage of using a non-bank lender is the perceived vulnerability associated with dealing with a smaller business. In addition, there is a perception in the market that non-bank lender loan products are more expensive than traditional lending options.

In reality, both of these points aren’t necessarily true. Many non-bank lenders have balance sheets every bit as strong as the traditional lenders and their tech-based systems provide nimble ‘checks & balances’ allowing them to tailor solutions and offer small business owners a degree of flexibility the big end of town can only dream of!

Is a non-bank lender right for me?

Business owners should review the pros and cons of loan products from both the big banks and non-bank lenders to find the best suited finance solution for their needs. No longer are business owners restricted to only working with 4 or 5 key institutions when it comes to securing finance for their business. They should include in these considerations the relative cost, ability to tailor a solution and speed when making their decision

Would you like to explore non-bank lending options?

Unsecured Finance Australia is a specialist in the non-bank lending of unsecured business loan options in Australia. Founded in early 2015, the company has assisted in arranging funding thousands of businesses from around Australia with affordable, flexible fast unsecured funding options.

‘We have seen a sharp increase in the number of businesses seeking small business funding in the last 12-18 months. The speed and flexibility we can provide with our lending solutions allow our clients to grow and support their increasing cash-flow needs. We can also provide solutions for specific opportunities and projects and this has seen an ever increasing demand over and above what our customers can achieve with their traditional banking source.’

Rob Hayward, Director Unsecured Finance Australia 2018


About the author

Jack Jordan 
With a strong academic and practical grounding in business and finance, Jack Jordan currently works as a Director of a number of Australian based tech and finance companies. A keen interest in the growth and development of businesses operating in the fintech industry saw him join the management team of Unsecured Finance Australia in early 2016.