Switchboard Finance logo – Servicing glossary term

Servicing

Servicing is the ongoing management of a loan or finance facility, including timely repayments, interest monitoring, and maintaining compliance with lender requirements. Proper servicing ensures smooth business operations and protects the business’s creditworthiness when using facilities such as Vehicle Finance, Equipment & Asset Finance, and Low Doc Loans.

Why Servicing Matters

Servicing maintains the business’s reputation with lenders, ensures compliance with loan agreements, and prevents penalties or default. It is a key consideration for Borrowing Capacity, Credit Limits, and long-term access to finance. Strong servicing habits also support how much you can safely draw from flexible cashflow tools such as your business cashflow system (WCL + LOC + Invoice) and short-term working capital loans. SMEs in the Tradie Hub, Truckie Hub, Café Hub, and Whitecoat Hub benefit from disciplined servicing to maintain financial stability.

How Servicing Works

  • Schedule and make regular repayments on time according to the loan agreement.
  • Monitor outstanding balances, interest rates, and fees so you can act early if cashflow tightens.
  • Use bank statements, accounting software, and bank feeds to track cashflow and compliance.
  • Maintain good lender relationships to support future business lines of credit and invoice finance approvals.

Related Switchboard Resources

Official info: business.gov.au

What is included in loan servicing?
Servicing includes making repayments, tracking interest and fees, and staying compliant with lender requirements.
Why is servicing important for future loans?
Good servicing builds trust with lenders, helping you secure future finance more easily and on better terms.
Can servicing affect my credit score?
Yes. Missed or late repayments can negatively impact your credit rating, while consistent servicing maintains or improves it over time.