Is it safe to apply for loans for business to an online lender
Before applying to any online business lender in Australia, check four things: the legal entity and ABN, a real street address, who actually makes the credit decision, and whether the reviews sit on a platform the lender cannot edit. HomeSec publishes all four. Our rating comes from Trustpilot, where anyone can post and nothing can be removed by us.
It depends entirely on the lender, and the good news is that you can tell the difference in about ten minutes without any specialist knowledge. Here is what to check, in the order that filters fastest.
1. Can you identify the legal entity?
Look for a company name, an ABN or ACN, and a physical street address — not a PO box, not a suburb, an actual address. Then check the ABN on the free ABN Lookup register and confirm the name matches and the registration is active.
A lender that will hold a mortgage over your home should not be difficult to identify. If the entity is not stated anywhere on the site, stop.
2. Is the licensing position stated, and does it make sense?
Business-purpose lending sits outside the NCCP Act, so a lender writing only business loans does not need an Australian Credit Licence and may not be a member of an external dispute resolution scheme. That is lawful and normal — but it means the consumer protections you might assume are there are not, and a good lender tells you that plainly rather than leaving you to discover it.
Be more cautious about the reverse: a lender implying consumer-style protections apply when they do not.
3. Whose reviews are they?
A rating displayed on a lender’s own website, generated by a plugin the lender controls, is not evidence of anything. Look for a third-party platform the lender cannot edit, and read the negative reviews rather than the score.
A polarised profile — mostly five-star with a cluster of one-star — is common in lending and is not by itself a red flag. What matters is whether the lender replies to the bad ones and what those replies say.
4. Do you know who makes the decision?
Ask directly: are you the lender, or are you placing this with a funder? Both models are legitimate, but the answer changes what a verbal approval is worth. If there is a funder behind the person on the phone, the timeline you are being given depends on somebody you have not spoken to.
5. What are you being asked to pay, and when?
This is where the real risk sits. Legitimate private lenders charge an establishment fee and legal costs, disclosed in writing on a Letter of Offer, and generally payable at settlement.
Be very careful about large upfront fees payable before any documentation, fees described as “application” or “assessment” charges that are non-refundable if the lender declines, and any request to send funds to an account that differs from the one on your documents. No genuine lender will ask for account details by text message.
6. Will they tell you when the answer is no?
The most useful question you can ask is: what would make you decline this? A lender who cannot answer is not underwriting anything, and a lender who never says no is not protecting you from a loan you should not take.
What we publish, so you can check us
Our legal entity, ABN and street address are on the About page. Our regulatory position is stated there in full, including which protections do not apply to your loan. Our credit team are named with real photographs and verified LinkedIn profiles. Our rating comes from Trustpilot, where we cannot remove anything, and every fee that exists in private lending is published with the question you should ask about each — including the ones we charge.
Reviewed by Catriona Anderson, General Manager