Whether you are purchasing commercial property, adding vehicles to your fleet, investing in new equipment or expanding your operations, access to finance can allow a business to invest without having to fund the entire cost upfront.
But the cost of that finance is changing. At its September meeting, the Reserve Bank of Australia increased the cash rate target by 25 basis points to 4.60%, marking the fourth increase in 2026. (Source: RBA)
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For businesses planning their next stage of growth, that means the finance used to fund expansion may be more expensive than it was previously, making the structure of the lending increasingly important.
Finance can create opportunities for business growth
Growth often requires investment before the financial return from that investment is realised.
A business may need to purchase equipment before it can take on additional work, secure larger premises before adding staff or acquire additional vehicles before expanding into a new area. This is where business loans can become part of a broader growth strategy.
Commercial property ownership can be a smart investment in business growth.
Rather than funding a major investment entirely from existing cash reserves, financing allows the cost to be spread over time while the business retains working capital for day-to-day operations.
How lenders assess business lending applications
Business lending can vary considerably between lenders, with each lender applying its own criteria when assessing an application. Depending on the lender and the type of finance, they may look at factors such as:
- Trading history
- Revenue and profitability
- Cash flow
- Existing debts and liabilities
- Industry and business type
- Available security
- The purpose of the loan
- The amount being borrowed
- The strength of the business overall
Two lenders looking at the same business may therefore reach different conclusions about how much they are prepared to lend, the security they require and the pricing they are prepared to apply. This is why working with a mortgage broker who specialises in business lending can be valuable, as they can compare how different lenders may assess the same application and identify options that are better aligned with the business goals.
Commercial property can form part of a longer-term growth strategy
For some businesses, the next stage of growth involves moving into larger premises or purchasing the property from which the business operates. Owning commercial property can give a business greater control over its premises and create room for future expansion, but it also represents a significant financial commitment.
This is where commercial loans can form part of a broader business growth strategy. Unlike other forms of business lending, finance for commercial property is typically assessed against both the strength of the business and the property being purchased.
Lenders may consider factors such as the type and value of the property, loan-to-value ratio, business financials, cash flow, lease arrangements and the security available. This means the amount a business can borrow, the rate it may receive and the structure of the loan can vary considerably between lenders.
With borrowing costs now higher, these differences can become more significant on larger commercial loan balances. Understanding what repayments may look like at current rates, and how the business would manage them if rates increased further, should therefore form part of the planning process before committing to a commercial property purchase.
Asset finance allow businesses to invest while preserving cash
For other businesses, the next stage of expansion may depend on vehicles, machinery, technology or specialist equipment.
This is where asset finance can play an important role. It allows businesses to invest in vehicles, machinery or equipment without paying the full purchase price upfront. By spreading the cost over time, the business can retain more working capital while still acquiring the assets it needs to take on additional work, increase capacity or support growth.
For example, a business may use finance to purchase another vehicle so it can put an additional field team on the road, service more customers or expand into a new area. It may invest in machinery that increases production capacity, reduces the time required to complete work or allows larger jobs to be taken on. Other businesses may finance specialist equipment that makes it possible to introduce a new service, improve efficiency or bring work in-house that was previously outsourced.
In each case, the asset is being purchased to support the business as it grows. The finance should be structured so the cost of the investment remains manageable while the asset starts contributing to the business.
Our approach to business lending
Whether the business is funding equipment, purchasing commercial property or preparing for its next stage of growth, the finance needs to fit the purpose behind the borrowing.
As mortgage brokers specialising in business lending, we start by understanding what the business is trying to achieve and the role finance needs to play in getting there. From there, we compare options across a range of lenders, considering how each may assess the business, how the finance is structured and the overall cost of borrowing.
The focus is then on finding a lending structure that suits the requirement and the position of the business. That may involve funding a property purchase, acquiring vehicles or equipment or supporting broader expansion, with the finance structured around what the business needs now and how it expects to grow.
The aim is to find an option that supports the business without placing unnecessary pressure on cash flow or limiting future flexibility. This reflects the way our team at [Company name] approaches business lending, with the focus on finding finance that suits both the immediate requirement and the direction of the business.