The rise of second-tier lenders in Australia

In the last five years, Australians’ perception of banks has changed. For many, dealing with banks has become a challenging and sometimes confusing process. As banks become more hands-off with their customers, more people are turning to brokers for help with their finance needs.

This trend leaves room for brokers to step in and provide support when customers need it most. They can offer an easier, more straightforward process for those clients, such as the self-employed, who don’t fit the traditional banks’ model of an ideal customer. This growing market share of brokers not only creates greater efficiency but also allows them to be more competitive.

Here are three key reasons why second-tier lenders are growing in popularity with borrowers in Australia.

Personal borrowers want an easy process

Servicing and capacity requirements have eased recently, providing an opportunity for increased finance to be provided. As the demand for credit and property values increases, more potential borrowers are returning to the market and looking for the easiest avenue possible to achieve their financing goals.

An easy process is often even more attractive than a cheap rate, and the biggest differentiators between banks and brokers are the level of service and speed to market. With that in mind, more personal borrowers are turning to brokers to service their needs quickly and easily.

Corporate borrowers need faster approval

Timing is often a problem when it comes to banks approving corporate loans. There may not be enough financial history in between financial years and figures may not be available, affecting speed to market. The process to review and analyse a complex commercial application can be quite lengthy, especially at major financial institutions.

Similarly, tax arrears can also be a problem as major banks will not support new applications for clients with tax arrears or ATO payment plans. A number of business owners take up the option of a payment plan to preserve cash. But if their requirements for finance increase, it can be difficult to gain support at a major bank.

As such, many corporate borrowers are turning to second-tier lenders to meet their needs faster, which is critical in a competitive environment where timing is everything.

Brokers offer more choice and flexibility

There are two things a broker can offer that a bank can’t: multiple lending choices and a long-term relationship.

At the moment, most banks are reducing their numbers of full-time branch employees and increasing the level of business that is managed by a central team. Additionally, internal banking processes have become clinical and inflexible. This not only means that fewer business bankers are available to offer personalised support, but also that customers have less choice when it comes to borrowing.
As a result, clients often feel lost and like they have no-one to turn to when they need help with important financial decisions.

It’s no surprise then that many customers are bypassing banks in favour of brokers. As the primary route to second-tier lenders, brokers can offer greater choice, flexibility, and support in finding the right loan for their needs.

If you’re looking to borrow or you’d like to chat about your options, feel free to get in touch with me directly at or find out more about what we do at Conquer Finance.


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