Quick answer
Warning signs of business loan scams include requests for fees before approval, guaranteed approval regardless of circumstances, pressure to sign immediately, unclear total costs, contact only through messaging apps or personal email, and details that do not match a real business. Check the company's ABN and ACN, search independent information, never pay upfront fees to unknown parties and read every document before signing.
Key points
- Never pay upfront fees to secure an unknown loan
- Guaranteed approval is a red flag
- Check ABN, ACN and independent information
- Pressure to sign quickly is a warning, not a favour
Why business owners are targeted
Scammers know that owners under cash flow pressure want money fast and may be willing to cut corners. A declined application, a tax deadline or a looming payroll makes people more likely to respond to an offer that seems to solve everything. Scams range from outright fraud, where money is taken and no loan appears, to identity theft through fake applications. Alongside them sit legitimate but predatory offers that are technically legal but deeply unfavourable.
Classic warning signs
A request to pay a fee, “insurance”, “security deposit” or “first repayment” before the loan is approved, especially to a personal account or via gift cards or cryptocurrency. A promise of guaranteed approval regardless of credit history. Pressure to sign or pay today. Contact only through messaging apps, social media or a free email address. A website with no verifiable company details, an ABN that does not match, or a physical address that does not exist. Requests for your internet banking login or one-time codes.
How to check who you are dealing with
Look up the business on the Australian Business Register using its ABN, and check the company name against its ACN. Search the business name with words like “complaint” or “scam”. Check that the phone number, website and documents all match. Call back on a number you found independently. Ask for the full terms in writing before providing sensitive documents. Legitimate lenders welcome these checks.
Protect your data
Use secure data-sharing tools offered by reputable lenders rather than sending your banking password. The Consumer Data Right provides a regulated way to share bank data with accredited parties; see our guide to open banking for business loans. Be careful where you upload identification documents, and watch your credit file for unexpected enquiries after any application.
Predatory, not fraudulent
Some offers are real but poor value: very high total costs hidden behind factors, daily debits that overwhelm cash flow, aggressive default terms, or loans pushed onto businesses that clearly cannot repay them. Compare every offer on total cost in dollars; see comparing offers on total cost. Ask what happens if you repay early or miss a payment. If answers are vague, walk away.
Lead farming
Some websites collect your details and sell them to many lenders, triggering a flood of calls and sometimes multiple credit enquiries. Before submitting a form, check whether your details stay with one team. We do not sell leads or spray enquiries to a list of lenders, and yo credit check applies at this point.
If something has gone wrong
If you have paid money to a suspected scammer, contact your bank immediately to try to stop or recover the payment. Report the scam to the relevant authorities, keep every message and receipt, and monitor your credit file for applications you did not make. If your identity documents were shared, consider identity protection steps.
Questions to ask any lender
What is your ABN and registered business name? What is the total cost, and when are fees paid? Will you run a credit check, and when? Who else will see my information? Can I have the full terms in writing before I sign?
An illustrative example
A café owner declined by her bank received an unsolicited message promising guaranteed approval if she paid an “insurance fee” first. The ABN in the message belonged to an unrelated business. She stopped, reported it and instead made one enquiry with a lender that did not charge anything to assess her situation.
Deal with real people
About us: we are a division of Company Cash Pty Ltd (ACN 673 762 297), and you can read more on our about page. Make a quick enquiry. Enquiries carry no credit check, there are no fees to ask, and your details stay with one team. Enquire safely.
Frequently asked questions
Are upfront fees always a scam?
Legitimate lenders may charge fees, usually deducted at settlement or set out in writing after approval. Requests to transfer money before approval to an unknown party are a classic scam.
How can I check a lender is real?
Look up its ABN and ACN, check its registered details, look for a physical address and independent information, and be wary of contact only via messaging apps.
What should I do if I think I have been scammed?
Contact your bank immediately, report it to the authorities and keep all records.
Can a legitimate lender still be a bad deal?
Yes. Some offers are legal but very expensive or inflexible. Compare total cost and read the terms.
Should I share my bank login with a lender?
No. Legitimate lenders use secure data-sharing tools rather than asking for your passwords.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a person who handles unusual deals calls you back.