Short answer
What matters first
Going direct to a lender suits a business with a simple need, a strong profile and a lender it already knows is a fit, such as its own bank for a secured facility. A broker or commercial credit facilitator suits a business that does not know which lender's policy fits, has something to explain such as short trading history, ATO debt, a past default or irregular deposits, needs an answer quickly, or wants to compare several structures side by side. Going direct means one lender's products and one assessment. A good broker compares several lenders but sends the file only to those likely to approve it. Either way, judge the result on the total repayable, repayment frequency, term and any guarantee, not on speed alone.
Detailed explanation
Many owners start with their own bank. Sometimes that is the right call. Often it is the slowest route to a decline, followed by a scramble through online lenders that each run another credit check.
This guide compares the two routes honestly, including when a broker adds little and when it saves real time and money.
When going direct makes sense
Applying directly is usually fine when the business has a long trading history, clean credit, strong financials and a straightforward request, and already knows which lender suits it. A secured facility from an existing bank relationship is the classic example.
It also suits owners who have the time to wait for a bank's assessment and the paperwork it requires, such as financial statements and tax returns.
When a broker makes sense
A broker or facilitator earns its place when lender fit is uncertain. Lenders differ sharply on trading history, industry, credit history, ATO debt and how they read bank statements. Sending a file to the wrong lender usually ends in a decline and a credit enquiry.
- Trading history under two years, or under twelve months
- ATO debt, a past default or recent dishonours to explain
- A deadline measured in days rather than weeks
- Uncertainty between a loan, a line of credit and invoice finance
- A wish to compare several offers side by side
How the costs compare
The lender sets the interest rate and fees either way. A broker does not usually make the same lender's product cheaper, but it can find a lender whose pricing and structure fit better, which often matters more than any small difference in rate.
Brokers are usually paid a commission by the lender when finance settles, and some charge the client a fee as well. Confirm whether you pay anything before you proceed. At Blackcube Capital, we never charge clients a fee. If finance settles, the lender pays us a commission.
Credit enquiries and declines
Every formal application can leave a credit enquiry. Several in a short period can read as repeated declines and make the next approval harder. Going direct to several lenders one after another is the riskiest pattern.
A good broker reviews the file first and approaches only lenders likely to say yes. If you have already been declined, our guide on what to do after a decline explains the next steps.
Illustrative scenario
A cafe trading for 18 months with a small ATO payment plan applies to its bank for $40,000. The bank's policy wants two years of trading and no tax arrears, so the application is declined after two weeks. A broker could have identified a non-bank lender that assesses recent card takings and accepts a payment plan that is being kept, at a higher cost but with an answer in days.
This is a general illustration, not a promise of approval. Each lender applies its own policy.
Caveats
A broker is only as good as its lender panel and its honesty about fit. Check that options are presented with the lender, total repayable and repayment frequency, and read our guide on how to choose a business finance broker before you commit.
Frequently asked questions
Is it cheaper to go direct to a lender?
Not necessarily. The lender sets its own pricing either way. A broker can find a lender whose structure fits better, which often saves more than a small difference in rate.
Will a broker apply to lots of lenders?
A good one will not. It should review your file and approach only lenders whose policy fits, to avoid unnecessary credit enquiries.
Can I use a broker if my bank has already declined me?
Yes. A broker can review why the bank declined and whether a different lender's policy is a better fit, though no one can guarantee approval.
Sources and further reading
About the writer: Jeff Gold writes Blackcube Capital's business funding guides. Guides are general information, checked against current lender practice and official sources, and are not financial advice.
Business Funding Support
Not sure which route fits your business?
Share your funding need and recent trading. We can tell you quickly whether a lender in our panel looks like a realistic fit.