The real difference is choice, not cost: a broker compares your application against multiple lenders and is usually paid by the lender, not you; going direct to a bank means one application, one lender's criteria, and one outcome. Neither is automatically better - which one suits you depends on how standard your situation is and how much your own bank actually knows about your business.
How a business loan broker works
A broker takes your business's financial position and matches it against a panel of lenders - often 20 to 40+ banks and non-bank providers - to find the options you are most likely to be approved for, on the best available terms. A broker is typically paid a commission by the lender once the loan settles, which is why most broker services, loan-o included, cost the borrower nothing directly. Because a broker's panel usually includes the same major banks you could approach yourself, using a broker does not mean giving up access to a big bank - it means having someone compare that bank against the alternatives on your behalf.
How going direct to a bank works
Going direct means applying to a single lender - typically your existing transaction bank - using their specific criteria, documentation requirements and turnaround times. If you already have a strong relationship and history with that bank, this can be a simple and fast path. The trade-off is that you only see one lender's offer, with no independent comparison of whether another lender might approve you faster, lend you more, or charge less for the same finance.
Broker vs bank direct: a straight comparison
| Broker | Bank direct | |
|---|---|---|
| Lenders considered | Multiple (typically 20-40+) | One |
| Cost to you | Usually free - paid by the lender | Free to apply |
| Access to major banks | Yes, usually included on the panel | Yes, if that is your bank |
| Independent comparison | Yes | No - one lender's offer only |
| Best suited to | Less standard needs, or wanting options compared | Simple needs with an existing strong bank relationship |
What actually determines who is paid what
This is the part borrowers most often ask about, and it deserves a straight answer. loan-o (B.K Brokers Pty Ltd) operates as Credit Representative 550800 of COG Compliance Services Pty Ltd. When a loan settles through a broker, the lender pays the broker a commission - this does not change the interest rate or fees you are quoted, and by law it must be disclosed to you. Going direct removes the broker from that relationship, but it does not mean the bank charges you less; the bank still earns its margin on the loan either way. For the full breakdown, including when a direct fee to you can apply, see how much a finance broker actually costs.
When bank direct makes more sense
- Your existing bank already knows your business and has approved similar finance before
- Your situation is straightforward and fits standard lending criteria cleanly
- You value an existing relationship over comparing every available option
When a broker makes more sense
- Your business is newer, seasonal, or does not fit a bank's standard box
- You want to know what other lenders would actually offer before committing
- Your bank has already declined or offered less than you expected
- You would rather one point of contact handle the comparison for you
For a deeper look at how loan-o weighs up lenders once you are working with a broker, see our guide to how to choose a business loan lender.
The takeaway
Bank direct is not wrong, and a broker is not automatically cheaper or faster - the honest answer is that a broker adds a comparison step your own bank cannot offer, at no direct cost to you in most cases. If your existing bank relationship already serves you well, direct can be the simpler path. If you are not sure whether your bank's offer is competitive, a broker comparison costs nothing to find out.
Finance is subject to lender approval, lending criteria, terms, conditions, fees and charges. The information in this article is general and does not take into account your personal or business needs.
Last reviewed: 1 September 2026. This article was prepared using information available from the Australian Securities and Investments Commission and the National Consumer Credit Protection Act 2009. This content provides general information only. It should not be treated as personal financial, tax, legal or credit advice.
Frequently asked questions.
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Usually not to you directly. Most brokers, loan-o included, are paid a commission by the lender once a loan settles, not a fee charged to the borrower. Always ask a broker upfront how they are paid.
Not always a lower rate, but often a better-fitting loan. A broker compares your application against multiple lenders' criteria, which can surface options - or a faster approval - your own bank would not have offered.
Not necessarily. Bank direct means one application, one assessment, and one outcome. A broker still lodges with one lender at a time, but chooses the lender most likely to approve quickly for your situation - which can be faster overall if your bank was never a good fit.
No. Most brokers, including loan-o, work with a panel of both major banks and non-bank lenders, so a broker application can still land with the same big bank you would have approached directly.
If you already bank with a lender who has approved similar finance for you before, has your full financial history on file, and offers competitive terms for your situation, going direct can be simple and fast. A broker earns their place when your needs are less standard, or you want your options actually compared.
Not sure if a broker or your bank is the better fit? Ask loan-o.
No obligation, no jargon - just a straight answer about your options.
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