Your own bank can only offer its own products. A broker compares options across a panel of lenders, including banks, non-bank lenders and specialist financiers, and is typically paid a commission by the lender when your finance settles, not by you. Going direct can work well for a simple deal where your bank has a competitive offer. A broker tends to win when you want choice, have a specialised need, or your situation is not straightforward.
The one real difference: one lender vs a panel
Strip away the marketing and the difference between a bank and a broker is simple. A bank assesses your application against its own credit policy and offers its own products. If you fit, you get a deal; if you do not, you get a decline, and you are back to square one. A broker takes one picture of your business to a range of lenders and comes back with the options that fit, side by side.
That access matters more than it used to. The ScotPac SME Growth Index 2026 found a record 52 per cent of SMEs plan to use a non-bank lender for their next investment, ahead of the 42 per cent planning to use a bank, and 34 per cent had already used a non-bank in the past year. Most of that non-bank market reaches business owners through brokers rather than branches.
What your bank gives you, and when it is the right call
A bank is not the wrong answer. If you have a long, strong relationship with your bank, a straightforward request and security to offer, your bank may well come back with a sharp deal and a smooth process. There is no third party involved, and for a vanilla deal that simplicity has value. If your bank has already indicated it wants to do the deal at a competitive rate, going direct can be perfectly sensible.
The limits show up when the answer is no, or when your need is unusual. A single bank cannot tell you what nine other lenders would have offered, and it has no reason to send you elsewhere when it declines you.
What a broker gives you
A broker gives you four things a single lender cannot: access to a panel rather than one credit policy, positioning of your application to the lenders most likely to say yes, one application instead of several, and someone whose job is to advocate for your deal. The RBA has noted that a rising share of SME loans is now originated or refinanced through brokers, which supports competition and helps match borrowers to suitable lenders (RBA Bulletin, October 2025).
Broker involvement in commercial lending is growing for the same reason: the number of brokers writing commercial loans rose about 24 per cent in a year to around 7,023, and commercial lending settled by brokers reached a record of about 22.68 billion dollars (MFAA, reported March 2025). Business owners are voting with their applications. You can read more in our guide to the advantages of using a finance broker.
How brokers get paid
In most cases a broker is paid a commission by the lender when your finance settles, not by you. Some deals may involve a fee, which would be disclosed to you in writing before you proceed. It is a fair question to ask early, and we will give you the specifics that apply to your finance. Our FAQ page covers this too.
Bank vs broker compared
Bank vs broker for a business loan
| Feature | Going direct to a bank | Using a broker |
|---|
| Range of lenders | One, the bank itself | A panel of banks, non-banks and specialists |
|---|
| Product choice | That bank's own products | Compared across the panel |
|---|
| If you are declined | Back to square one | Other lenders on the panel can be tried |
|---|
| Who does the legwork | You | The broker |
|---|
| Positioning your application | You present it yourself | Matched and packaged for the right lenders |
|---|
| Cost to you | No third party | Usually none: the lender pays commission on settlement |
|---|
| Non-bank access | Not through the bank | Yes, a growing part of the market |
|---|
| Best suited to | A simple deal with a keen bank | Choice, a specialised need, or a non-vanilla file |
|---|
When to use each
Go direct to your bank when the deal is simple, your bank is keen, and you value a single relationship over shopping around. Use a broker when you want to compare the market, when your situation is not vanilla, a newer business, past credit issues, a specialised industry or asset, when you have been declined once already, or when you simply do not have the time to approach lenders one at a time.
If you are not sure which camp you are in, that uncertainty is itself a reason to compare. Talk through your options with a broker, start on the business loans hub, or learn more about how we work. If your need is a revolving working-capital buffer rather than a lump sum, the line of credit page is a good next read.
Reviewed by the 121 Brokers credit team. General information only: not financial, legal or tax advice, and it does not consider your objectives, financial situation or needs. 121 Brokers arranges business-purpose finance only and is a broker, not a lender. Approval, rates, fees and timing are determined by the lender and subject to its credit criteria. Broker remuneration is disclosed to you before you proceed.
