Before you sign a 'business rescue' loan: 10 checks

Before you sign anything, call the Small Business Debt Helpline on 1800 413 828. It's run by Financial Counselling Australia, funded by the Australian Government, and in its own words: free, independent and confidential — they don't sell anything or work on commission.

Reading this at 11pm with an offer in front of you? The checks below work tonight. The phone works at 9am. And if the offer 'expires today', that urgency is itself the first thing to check.

The Australian Financial Security Authority lists 'creating an unnecessary sense of urgency' among the tell-tale signs of untrustworthy advisers, alongside high fees payable in advance and rushing your decision-making (AFSA, 2022).

A legitimate lender's offer survives 48 hours and a phone call to a financial counsellor. An offer that can't wait until tomorrow is priced on you not checking it.

Rescue-style lenders usually advertise monthly rates: 'from 0.77% per month', 'from 0.79% per month'. Multiply by 12 and the floor is roughly 9–10% a year before any fees — and 'from' rates are the best case, for low-risk loans with plenty of property equity.

One Brisbane brokerage puts the real range in writing: private lender rates for ATO debt payouts 'typically range from 9–18%' depending on risk. Market commentary puts caveat lending at roughly 0.8% to 2.5% per month — about 10% to 30% or more a year.

For comparison: the ATO's own interest charge is 11.43% a year for the July–September 2026 quarter — interest is the only cost, no security is taken over your home, and there's a process for asking that interest be reduced.

Many fast lenders quote a 'factor rate' or repayment schedule instead of an interest rate, and almost none publish their establishment fees, legal fees or exit fees up front. Ask one question in writing: 'What is the total amount I will repay, in dollars, including every fee?'

If they won't put that number in writing before you sign, you have your answer about what it costs.

Most 'same day' business loans are really property loans. Lenders' own pages say it plainly: 'we require equity in a real estate asset, this can be a residential property', 'all our loans require real estate as security', 'the lender lodges a caveat over your property as security'.

One major fast lender's broker documents state that a personal guarantee from the director is required for all loans, and that on default the lender has the right to lodge caveats. Larger loans can take a charge over all present and after-acquired property — everything the business owns now and later.

A caveat on your home means you generally can't sell or refinance without the lender's consent. The loan may be in the company's name; the risk is sitting on your house.

The Australian Financial Complaints Authority is the free dispute body — but not all business lenders are required to be members. AFCA reported record small business complaints in 2024–25 (4,648) and cautioned that where a lender isn't a member, business owners are left with fewer options for redress.

Search the lender's name on AFCA's public member register at afca.org.au before signing. No membership means that if something goes wrong, your main option is court — at your cost, on their contract.

ASIC states the National Credit Code applies to loans to individuals wholly or predominantly for personal, domestic or household purposes. Business-purpose loans generally sit outside it — which can mean no responsible-lending obligations, no legal right to a hardship variation, and no cap on fees and default interest.

Some lenders say this themselves in their terms: they lend exclusively to companies, do not offer regulated consumer credit, and ask you to confirm the exemption applies. That declaration is doing legal work — read it as carefully as the rate.

ASIC has sued one lender, Oak Capital, alleging loans were structured through companies specifically to avoid the Code while individuals put up their own homes as security — and that some who defaulted had their homes repossessed. Those are allegations before the Federal Court, not findings; the structure they describe is the thing to check for in your own offer.

The advertised rate is the rate while everything goes well. Ask what the default rate is, what a missed payment costs per day, and what the lender can do — and how fast — if the business's revenue dips.

The Australian Small Business and Family Enterprise Ombudsman has documented a fringe-lending case at an effective 240% a year — $6,000 borrowed, chased for nearly $60,000 — with daily late-payment fees that can escalate to $1,000 a day (ASBFEO, November 2025). With a caveat in place, the path from missed payment to forced sale is short.

Broker commissions on commercial finance are paid by the lender and rarely published. One brokerage describes upfront commissions commonly in the range of 0.5% to 1.5% of the loan; some private lenders openly advertise 'generous referral fees' to the people who introduce you.

None of that makes a broker dishonest. It does mean the person urging you to refinance is paid when you sign, and paid nothing if you set up an ATO payment plan for free. Weight their urgency accordingly.

The pitch usually leans on the ATO: your tax debt will be reported to credit agencies, a director penalty notice will take your house, act now. Check each claim against the source.

Credit reporting: the ATO can only disclose business tax debts of $100,000 or more, overdue by more than 90 days, where you're not engaging with them. Setting up a payment plan is engaging — it generally stops disclosure while you keep to the plan, and it costs nothing.

Director penalty notices: a DPN is serious, but the 21-day window has formal responses — including appointing a small business restructuring practitioner or administrator — and 'borrow against your house at distressed rates' is only one of them, and the only one that pays a broker. A payment plan can help manage the underlying debt, but on its own it generally doesn't remove the director's personal liability.

The ATO's own red-flag list for dodgy insolvency advice (QC 64127) warns about advisers who make contact right after creditor court action, charge fees based on a percentage of your debt, or suggest moving assets. The playbook is documented; check the offer against it.

If you owe the ATO $200,000 or less, you may be able to set up a payment plan yourself through ATO online services — no fee, no security, no broker. Depending on your circumstances you may not get the terms you want, but asking is free.

The ATO can also remit interest in certain circumstances — you can ask, and you don't need to pay anyone to ask for you. Interest remitted after 1 July 2025 doesn't need to be included as assessable income.

For companies with total liabilities of $1 million or less, small business restructuring lets directors stay in control while a plan is put to creditors — tax debts don't need to be paid first, but lodgements must be up to date and employee entitlements that are due paid. AFSA lists further options for sole traders. A financial counsellor can walk you through all of it, free, before you sign anything.

Copy these into an email. A legitimate lender answers all of them in writing.

1. What is the total amount I will repay, in dollars, including all fees?

2. What is the annualised interest rate, including establishment and exit fees?

3. What is the default interest rate, and what does a missed payment cost per day?

4. What security are you taking, and does it include a caveat or mortgage over my home?

5. What exactly does my personal guarantee cover?

6. Are you a current AFCA member? What is your membership number?

7. Is this loan regulated under the National Credit Code? If not, why not?

8. What commission or referral fee is being paid, and to whom, if I sign?

9. Can I repay early, and what does that cost?

10. Will you give me 48 hours to get independent advice before this offer lapses?

Small Business Debt Helpline — 1800 413 828. Financial counsellors for small business owners and sole traders. Free, independent, confidential; they don't sell anything or work on commission. AFSA's own guidance: 'For help you can trust, contact the Small Business Debt Helpline.'

National Tax Clinics — free tax help through university clinics around Australia, funded by the government, for people who can't afford a tax professional. Clinic clients routinely carry large debts; there is no shame threshold here.

National Debt Helpline — 1800 007 007 — for the personal side: the mortgage, the credit cards, the household bills that business stress spills into.

TEKVA doesn't lend money, sell anything, or take commissions. This page is general information, not financial or legal advice — for decisions about your situation, talk to a financial counsellor or a qualified adviser.