Quick answer
On a first call with a business lender, ask what the loan will cost in total dollars including every fee, what security and personal guarantees are required, whether you can repay early and what that costs, what happens if a repayment is late, what the process and timeline look like, and what conditions any approval would carry. Good answers are specific and in dollars; vague answers deserve a follow-up.
Key points
- Ask for the total cost in dollars, not just the repayment.
- Find out exactly what security and guarantees are involved.
- Understand early repayment, late payment and the end of the term.
- Write the answers down and ask for them in writing before you sign.
Most advice about business finance focuses on what the lender will ask you. That matters — our call prep by situation pages cover it in detail. But the first call should run both ways. The questions you ask are how you find out whether an option actually suits the business, and they’re how you spot the ones that don’t.
Here are the questions worth asking on any first call, grouped by what they uncover, with a sense of what a good answer sounds like.
Who am I dealing with?
- Are you the lender, or are you arranging finance with other lenders?
- How are you paid? By the lender, by me, or both?
- Who will I deal with from here to settlement?
Good answer: clear, unembarrassed, specific. You’re entitled to know who you’re talking to and how they earn.
What will this cost, in dollars?
This is the most important group, and the one most often skipped.
- What is the total cost over the term, in dollars, including every fee?
- What fees apply? Establishment, ongoing or monthly, legal, valuation, discharge, early repayment.
- How is interest calculated and charged? Paid monthly, or added to the loan?
- Is the cost fixed, or can it change during the term?
Good answer: a breakdown you could write on a single page. Our page on the total cost of a business loan explains how to get one and how to compare offers fairly.
What am I putting up?
- Is the loan secured? Against what? Property, equipment, business assets, or nothing.
- Is a personal guarantee required? From whom?
- Does the lender register security over business assets? If so, what’s covered?
- If property is involved, is it a first mortgage, second mortgage or caveat?
Good answer: a plain description of exactly what the lender can rely on if things go wrong. More in personal guarantees and security.
Want to put these questions to a specialist? Request a call-back here and keep this page open while you talk.
How do I get out of it?
- Can I repay early? What does it cost, and what does it save?
- What happens at the end of the term? A balloon, a residual, a clean finish?
- If this is short-term, what happens if my exit runs late? Is there an extension, and what does it cost?
Good answer: specific dollars and dates. Exit terms matter most on short-term loans. Our page on exit and early repayment goes deeper.
What if something goes wrong?
- What happens if a repayment is late? Fees, default interest, notice periods.
- Is there a hardship process?
- Are there conditions I have to keep meeting? Reporting, minimum balances, insurance.
- How are complaints handled? Internal process first, then any external body.
ASIC’s guidance on disputes about commercial loans points out that lenders offering only commercial loans aren’t always required to belong to the Australian Financial Complaints Authority, so it’s worth asking where a complaint could go if you couldn’t resolve it directly.
What happens next, and when?
- What documents do you need, and in what form?
- Will there be a credit check? When?
- Is a valuation needed? Who arranges and pays for it?
- How long does each step usually take for a situation like mine?
- What conditions would an approval carry?
Good answer: a clear list and an honest timeline. If a date is critical, say so and ask whether it’s realistic.
How do I keep track of the answers?
Write them down during the call, then ask for the key points in writing. A simple table works:
| Question | Answer on the call | Confirmed in writing? |
|---|---|---|
| Total cost in dollars | ||
| All fees | ||
| Security and guarantees | ||
| Early repayment | ||
| Late payment | ||
| Next steps and timeline |
Our guide on what to write down after a finance call has a fuller template.
Why do these questions matter for small businesses?
Because the protections are real but not a substitute for reading. ASIC notes that small business contracts for financial products and services, including business loans, are covered by unfair contract term protections where at least one party has fewer than 100 employees or turnover under $10 million, and the upfront price is $5 million or less. Those protections help if a term is unfair. They don’t stop you signing up for a loan that’s legal but wrong for your business. Your questions do that.
Which questions matter most for my situation?
Every question on this page is useful, but some matter more depending on what you’re borrowing for:
| Situation | Questions to prioritise |
|---|---|
| ATO debt | Will the ATO be paid directly? What happens to my payment plan? |
| Equipment | Is there a balloon? Is the equipment the only security? |
| Property-secured | First or second mortgage? Valuation cost? What if the exit is late? |
| Cash flow gap | Can I repay early when the money arrives? Would a revolving limit suit better? |
| Refinance | Does the new facility cost less in total, not just per month? |
| Short-term or caveat | What’s the extension cost if my exit runs late? |
Our call prep by situation pages go through each of these in detail, including what the specialist is likely to ask you. The call-prep tool also lists two questions worth asking for whichever topic you choose.
Ready to ask them?
Loan Hotline specialists expect questions and answer them in plain terms. Requesting a call-back doesn’t involve a credit check, your details are kept with one team rather than being farmed out to a host of lenders, and the person who rings has read your situation before the call.
Please fill in the request accurately — amount, purpose, state and any property — so the answers you get are about your real situation. Pick a time and we’ll ring you.
Frequently asked questions
Why ask for the total cost in dollars rather than a rate?
Because business loans can carry establishment fees, ongoing fees, legal costs and different repayment structures that a single rate doesn't show. A total in dollars over the period you'll actually use the money lets you compare like with like.
Is it rude to ask lots of questions on the first call?
Not at all. A good specialist expects it. The first call should run both ways — they learn about your business, you learn about the options.
What should I do if a lender won't answer a question?
Ask again, more specifically. If you still can't get a straight answer on cost, security or early repayment, that's a sign to slow down.
Should I ask whether they're a lender or a broker?
Yes. It's reasonable to know who you're dealing with, whether they're lending their own money or arranging finance with other lenders, and how they're paid.
Do I need to ask all of these on the first call?
No. Some answers depend on documents and assessment. On the first call, focus on cost structure, security, early repayment and next steps; firm figures come with the written offer.