Who will lend to you when everyone else has said no

It turns on one fact, not on finding a more willing lender: whether anyone in your ownership group owns real property with equity in it. Where there is equity, a property-secured lender can usually help after banks and cash flow lenders have refused. Where there is none, the lenders still saying yes are the expensive ones, and a free financial counsellor is the better call.

The question has a real answer, and it is not "shop around harder"

By the time somebody searches this, they have usually been refused by their bank, by one or two online lenders, and possibly by a broker who stopped returning calls. The natural conclusion is that the business has been judged and found wanting, and that the remaining task is to find somebody less fussy.

That is the wrong model of what happened. Those lenders did not reach different conclusions about you — they ran the same test. Banks, cash flow lenders and most online products assess the same three things: what the business turns over, what the bank statements look like, and what the credit file says. If those are the reason for the first no, they are the reason for the fourth, and a fifth lender running the same test will reach the same answer. Shopping around inside one category is not shopping around.

What changes the answer is changing what the loan is assessed on. That is a smaller set of lenders than the internet suggests, and the honest way to think about it is not "who is most likely to say yes" but "what do I have that something could be secured against".

You are not the first one this week

Most owners in this position asked their bank first, and the bank said no for reasons that had nothing to do with whether the loan would be repaid: a mark on the credit file, a late lodgement, financials that are a year out of date. Those are the things a bank exists to care about. None of them says anything about whether there is equity in a property.

That gap is where HomeSec has been since 2004. We are not here to judge the situation, we are here to find solutions, and we have seen this one often enough that it does not surprise us. What we look at is whether there is sufficient equity in real estate and whether the purpose is a genuine business one — no financials, no credit score threshold, and a real person reads every file. From a clean, complete scenario funds can be available in as little as 24 hours, and interest can be capitalised for up to six months, so there is nothing payable while the business gets its feet back under it.

Back to the question, including the part of the answer that is not about us.

What is actually still open to you, keyed on what you have

Not a list of lender types — our page on what private lenders are and how to tell them apart already does that. This is the same market read from where you are sitting.

Why the easiest loan to get is rarely the one you want

"What is the easiest loan to get with bad credit" is one of the most-asked versions of this question, and it deserves a straight answer rather than a sales one. The relationship is close to mechanical: the less a lender checks before advancing money, the more it charges for the privilege and the faster it wants the money back.

A product that approves in minutes off a bank feed is pricing for the fact that it knows almost nothing about you, and it will usually debit your account daily or weekly from the moment the funds land — which is money leaving the business before the thing you borrowed for has earned anything. A secured loan asks more of you at the start: a property, a business purpose, a credible way out. It asks considerably less of you afterwards.

So the better question is not which loan is easiest to obtain. It is which loan the business can still be carrying in six months, and whether the thing you are borrowing for will have done its work by then.

When "yes" is the warning sign

There is a point in this process where somebody finally says yes, and the relief is enormous. It is also the moment to slow down, because people who have been refused repeatedly are exactly who the loan scams are built for — Scamwatch says as much, noting that people experiencing financial hardship may be particularly vulnerable.

The pattern ASIC describes has been the same for years. The borrower is told they qualify, sometimes for more than they asked for, and then told they must pay insurance or fees for the loan before the loan can be provided — usually into Australian bank accounts opened for the purpose of collecting them. ASIC's position is blunt, and worth keeping in mind as a rule rather than as a fact about one company: if you are asked to contribute fees or insurance costs before you are advanced any money under the loan, you should treat the proposed transaction with a great deal of suspicion.

Scamwatch lists the same shape — an upfront fee for "payment protection" insurance or "loan establishment" charges to secure the loan, requests to pay funds into a personal bank account, and a promise that premiums will be refunded in a few months' time. ASIC's other piece of advice is the cheapest check there is: always make sure the business you are dealing with is readily listed in the public domain. A real lender has an ABN, a registered office, named people and a phone number that existed before you went looking.

None of which makes every cost a red flag, and it would be dishonest to imply otherwise. The difference is the sequence and the transparency. A legitimate charge is disclosed in writing by a named entity before you commit to anything, and it follows an actual assessment of your file rather than preceding one. At HomeSec the only one is a small commitment fee, payable only once your loan is conditionally approved.

There is a second kind of yes worth being careful about, and it is not a scam — it is a structure. Some lending is comfortable precisely because the lender expects to be repaid out of your property whether or not the business recovers, which means the loan can be written without anybody forming a real view about affordability. The test you can apply yourself, on the phone, is to ask what the lender expects to happen if the plan does not work. Somebody who has thought about it will tell you. Somebody who has not, or who seems untroubled by the question, is describing an exit that is not the one you have in mind.

If there is no property, here is what actually helps

This is the part of the answer most pages in this category leave out, because it does not end in an application. If there is no real property anywhere in the ownership group and the trading is the problem rather than the timing, more debt is not the instrument — and we would rather say so here than take the call and say it a week later.

1. 1
   Ring the Small Business Debt Helpline on 1800 413 828.A not-for-profit set up by Financial Counselling Australia with Australian Government funding. The service is free, independent and confidential, weekdays 9am to 5:30pm AEST/AEDT, with a live chat if you would rather not talk. A financial counsellor will negotiate with the ATO and with creditors on your behalf and will tell you honestly whether the business is viable — which is the question underneath the loan question.
2. 2
   If the debts are personal as much as business, the National Debt Helpline is 1800 007 007.Also free financial counselling. Many business owners in this position have both kinds of debt tangled together, and the guarantee they signed years ago is usually what ties them.
3. 3
   Deal with the ATO directly rather than around it.A payment plan is available far more often than people expect, and it does not require a lender. Our guide on setting one up covers how, and what to do if one has been refused or cancelled.
4. 4
   If the company may not be able to pay its debts as they fall due, speak to a registered liquidator before borrowing, not after.Not because the answer is insolvency. Because the questions change once a company is in that territory, and small business restructuring is a real option that borrowing more can foreclose.

What turns a no into a yes

Where there is property, the difference between a file that proceeds and one that does not is usually preparation rather than persuasion. Four things, and all of them are free.

• A payout figure from each existing lender, not a statement balance. This is the number your available equity is actually calculated from, and it is the one people are most often wrong about.
• Everyone on the title, in the conversation. Every registered proprietor has to sign. A co-owner who finds out at documents is the most common reason a workable file stalls.
• The exit, in one sentence. What repays this, and when. If it takes a paragraph, it is not ready — and an exit that is a hope rather than a mechanism is the most common reason a file with plenty of equity still does not proceed.
• The purpose, stated plainly. Business or investment. Credit provided for those purposes is not regulated under the National Consumer Credit Protection Act 2009 (the NCCP Act), and the protections available to consumer borrowers do not apply.

With those four, an indicative answer takes a phone call rather than a week — and if the answer is still no, you will get it on that call with the reason, rather than after a fortnight of waiting. From $20,000 to $5,000,000, secured by property, assessed by a person.

This page describes how the Australian business lending market works and what free help exists. It is general information, not legal, insolvency or financial advice, and it is not a recommendation to take any particular loan: whether borrowing is right for your business is a question for you and your accountant, and whether the business is viable is one a financial counsellor or registered liquidator will answer honestly and at no cost. The ASIC and Scamwatch guidance referred to above, and the Small Business Debt Helpline's own published description of its service, are the primary sources behind what is set out here. Every application is subject to assessment and approval.

Reviewed by Paul Stone, Joint Chief Executive