More than a third of small businesses sourced lending from non-banks in the past 12 months, according to SME lender ScotPac.
Australian small and medium-sized enterprises (SMEs) are increasingly turning to non-bank lending solutions to support everyday business operations, with new research showing that the vast majority of business owners were open to using a non-bank.
According to ScotPac’s biannual SME Growth Index Report, 92 per cent of SMEs have either already used, or would consider using, a non-bank lender for their commercial finance needs, with 34 per cent having done so in the past year for capital expenditure, as well as for working capital, cash flow management, and operational resilience needs.
Most SMEs sourced an average of 67 per cent of borrowings from a single non-bank, according to the survey of 728 SME enterprises with annual revenues of $1–20 million conducted by East & Partners.
ScotPac noted that SMEs are increasingly turning to non-banks to provide flexible solutions quickly and are reducing reliance on property security (typically required from a bank).
Indeed, the SME Growth Index found that 19 per cent of SMEs were drawn to non-banks because they didn’t want to rely on using personal guarantees or non-property assets as security, with 16 per cent drawn to non-banks because they didn’t have to use their family home as collateral (16 per cent).
Other attractions included streamlined onboarding and reduced administration processes (17 per cent) and faster access to funds (16 per cent).
ScotPac noted that a growing cohort of SMEs believed bank credit appetite for SME lending had been falling (12 per cent), four times the level from 2018.
The CEO of the SME lender, Jon Sutton, said the results reflected a significant evolution in how SMEs are thinking about finance.
“Non-bank lending is no longer viewed as a niche or secondary funding option,” he said.
“More SMEs are integrating flexible funding solutions into their core business strategy to improve cash flow certainty, unlock working capital tied up in assets like invoices, and reduce pressure on personal balance sheets.
“Asset-based lending solutions, such as invoice finance and working capital facilities, allow businesses to access funding based on the strength of their receivables and trading activity, rather than relying solely on property-backed lending.
“That flexibility is becoming increasingly valuable as SMEs navigate rising operating costs, uneven trading conditions and tighter credit environments.”
ScotPac noted that demand for flexible funding solutions continued to grow across sectors, including transport, manufacturing, wholesale trade and professional services, where cash flow timing and working capital management remain critical business challenges.
“Businesses are becoming more strategic about liquidity, cash flow resilience and reducing concentration risk, and ScotPac has the broadest range of finance solutions to support them,” he said.
“Brokers who understand asset-based lending and working capital options are increasingly well positioned to guide SMEs through changing market conditions.”
Brokers using a growing range of non-bank lenders
The ScotPac data comes as brokers also diversify the number of non-bank lenders they are working with.
In The Adviser’s 2026 Product of Choice: Non-Banks Survey, which was live from 9 April to 1 May 2026, nine different non-banks were championed by brokers for their lending products, a much broader spread compared to recent history.
For commercial and business ventures, ScotPac earned the highest praise for debtor finance loans, Bizcap took the top spot for SME loans over $250,000, Prospa led the field in SME loans under $250,000, La Trobe Financial secured first place for commercial mortgages, and Angle Finance was ranked first by brokers for equipment and asset finance loans.
Pepper Money was the only non-bank to secure the top spot across multiple categories, capturing the number-one spot for prime owner-occupied loans, investor loans, and specialist loans.
Bluestone Home Loans proved to be the go-to partner for navigating near-prime loans, while Liberty Financial was named the premier provider for SMSF loans.
Personal lenders also delighted brokers this year – Wisr claimed the crown for personal loans, and Plenti was voted number one for short-term loans.
You can find out more about how non-banks are ramping up their support for brokers and their clients in the June edition of The Adviser magazine, out now!
[Related: Non-Bank Product of Choice 2026: Mapping the market]
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