How to check a business lender is legitimate before you hand over anything

When a business needs money, it’s at its most exposed: under time pressure, willing to share bank statements and ID, and inclined to believe an offer that sounds like relief. That’s why it’s worth spending ten minutes checking who you’re dealing with before you hand over anything. The checks below take less time than filling in most loan applications.

This applies to lenders, brokers, comparison sites and anyone else who’ll handle your information — including us.

Why does checking matter more for business loans?

Two reasons. First, business lending carries lighter regulation than consumer lending. ASIC’s credit legislation guidance confirms the National Credit Act doesn’t apply to credit provided wholly or predominantly for business purposes, and its information sheet on commercial loan disputes notes that lenders providing only commercial loans aren’t legally required to hold a credit licence or to be members of AFCA. That doesn’t make them bad lenders — many excellent lenders are commercial-only — but it does mean you can’t rely on a licence alone as a stamp of legitimacy.

Second, scammers target businesses deliberately. Scamwatch’s small business guidance highlights business email compromise, invoice and payment redirection, phishing and impersonation of real businesses, sometimes with spoofed phone numbers and email addresses.

What should you check first?

1. The legal entity. Find the company name and ABN or ACN on the lender’s website, email signature or quote. Then look it up yourself:

• ABN Lookup shows the entity name, ABN status, GST registration and business names.
• ASIC’s registers let you search companies and business names. Basic details — name, type, registration numbers and date, and lodged documents list — are free. Professional registers include credit licensees and representatives.

2. The match. The entity on the website, the entity on the loan contract and the entity on the registers should be the same or clearly related. A loan offer from one name with a contract in a different, unexplained name is a warning sign.

3. The age and footprint. A recently registered company with no history isn’t automatically a problem, but combined with other red flags it should make you slow down.

What claims should you verify?

Claim	How to check
“We’re licensed”	Search ASIC’s professional registers for the licence or representative number
“We’re AFCA members”	Search AFCA’s member list or ask for the membership number
“We’re a bank”	Only authorised deposit-taking institutions on APRA’s register can call themselves banks
“We’re with a government program”	Check the program on the relevant government website, not via the link provided
“Approved lender panel”	Ask which lenders, by name, will see your file

What are the red flags?

• Guaranteed approval. No legitimate lender approves before assessing. Our page on bad credit lending explains what flexible lenders actually do.
• Upfront fees to release funds. “Insurance”, “processing” or “security deposit” fees payable before you see an approved contract.
• Pressure. “This offer expires in an hour.” Real lenders give you time to read the contract.
• Payment to personal accounts or by gift card, cryptocurrency or overseas transfer.
• Requests for passwords or online banking credentials outside a secure, read-only bank-link service.
• Unsolicited contact from a “lender” you’ve never approached.
• Changed bank details on an invoice or settlement instruction, especially by email.

If something feels off, stop and verify through an independent channel — a phone number you found yourself, not one in the message.

Partway through checking a lender and want a second opinion? Send us a quick enquiry — there’s no credit check to ask, and we’ll tell you what we see.

How do you spot a lead farm?

Not every risk is a scam. Some websites collect your details and sell them to multiple lenders or brokers. You’ll know it’s happened when your phone starts ringing with offers from companies you’ve never heard of. Each lender that then runs a formal credit check can add an enquiry to your file.

Before you submit any form, ask:

1. Who exactly will receive my details?
2. Will anyone run a credit check before I agree?
3. Will a person review my situation?
4. How are you paid?

Our page on brokers and marketplaces explains the difference between a matching service and a lead seller in more detail.

What should the contract tell you?

Before signing, make sure you can identify:

• the lender’s legal name, ABN or ACN, and address;
• the amount you’ll actually receive after any deducted fees;
• the total you’ll repay in dollars, and the repayment schedule;
• every fee, including early repayment and default fees;
• what security is being taken and any guarantees;
• how complaints are handled, and whether an external dispute scheme applies.

business.gov.au recommends checking a lender on the ASIC register before applying, and comparing upfront and ongoing charges, loan amounts and terms. Small business loan contracts in standard form are also covered by unfair contract term protections that ASIC administers. None of that replaces reading the contract carefully and getting advice where you’re unsure, particularly if you’re signing a personal guarantee.

How do you protect your documents?

• Send bank statements and ID only through the lender’s secure portal or a verified email address.
• Use read-only bank-link services rather than sharing your banking password.
• Call the lender on an independently verified number before acting on any change of payment details.
• Keep a record of what you sent, to whom and when.

An illustrative example

Purely illustrative: a transport operator receives a text offering “pre-approved business funding, no credit check, funds today”. The link leads to a polished site asking for ID, bank statements and a $1,500 “insurance fee” before funds are released. A quick ABN Lookup shows the ABN belongs to an unrelated cleaning business, and the company name doesn’t appear on ASIC’s register. Ten minutes of checking saves the fee — and the identity documents.

What should you do if you think you’ve been targeted?

Act quickly and in this order:

1. Stop contact and stop payments. Don’t send further money or documents.
2. Call your bank using the number on its website or your card. If you’ve paid, ask whether the payment can be stopped or recalled.
3. Secure your accounts. Change passwords, enable multi-factor authentication and check for unfamiliar devices or rules forwarding your email.
4. Report it. Scamwatch collects reports about scams, and your report helps warn other businesses.
5. Watch your credit file. If you shared ID, consider monitoring your credit report for applications you didn’t make.
6. Tell your customers and suppliers if your business name or email may have been used to impersonate you, so they don’t pay a fake account.

Which questions should you ask any lender on the first call?

• What is your full legal name and ABN?
• Are you the lender, or will you send my file to someone else?
• Will you run a credit check before I agree to proceed?
• What will I receive in writing before I sign anything?
• What fees could apply, and when are they payable?

A legitimate lender or broker will answer all five without hesitation. Evasive answers, or pressure to skip straight to sending documents, tell you most of what you need to know.

Finally, keep a short record of every lender or broker you’ve spoken to: the name, the date, what you sent them and whether you agreed to a credit check. If your phone starts ringing with offers from companies you’ve never heard of, that record tells you where your details went. It’s also handy if you later need to make a privacy request or a complaint.

Want to deal with someone you can check?

We’re happy to be checked. Our entity details are in the footer of every page, and our how it works page explains exactly what happens to your enquiry. When you start a 60-second enquiry, a real person reads it and calls you. There’s no credit check to ask, your details aren’t passed to a crowd of lenders, and when you answer the form accurately we can approach the right lender for you first time.