5 Red Flags Your Business Loan Deal Is Worse Than It Looks

16 Nov

General SME • Loan Awareness

Some business loans look fine at first glance. But hidden fees, bad terms and the wrong structure can wreck your cash flow fast.

Here are five simple red flags that mean your loan deal might not be as good as it looks — plus what to do before it bites you.

A “good interest rate” doesn’t matter if the structure, fees or payout terms are bad.

1. The repayments are high for the size of your loan

This usually means the term is too short.

Your equipment or vehicle might last 5–7 years — but your loan term is only 12–24 months. That’s a cash flow trap.

Fix: extend the term or refinance to smooth repayments.

This is a classic gotcha in many SME loans.

You think you’re paying out the remaining balance — but the lender charges:

Check if a business.gov.au–recommended “simple interest” structure suits you better.

Loan stacking chokes cash flow faster than almost anything.

If you’ve got:

You’re paying multiple high repayments instead of one structured facility.

Using the wrong loan for the wrong purpose is extremely common.

Examples:

Fix: match terms to purpose — e.g. equipment finance for long-life assets.

If a lender only shows you one product, your deal might not be competitive.

You should always compare:

This is the core value of a broker: showing what the bank won’t.

Loan deals aren’t “good” or “bad” — they’re either right or wrong for your business structure.

Send your loan details — lender, term, repayments and fees. We’ll check for hidden costs, better structures and cash flow improvements.