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The lender says it is seeing a sharp increase in commercial borrower enquiries heading into 2026 as businesses refinance to manage higher interest rates, address tax obligations and inject fresh working capital.
Msquared Capital general manager of loan origination and credit Michael Volkiene said the trend reflects a broader shift in how commercial borrowers are accessing finance.
“Some lenders are increasingly stepping away from transactions involving complex structures, mixed-use assets or non-standard income,” Volkiene said.
“Borrowers are seeking flexibility and speed, which is driving strong demand for short-term commercial lending solutions.”
New funding strategies
According to Volkiene, new pressure means that many businesses entering 2026 are refinancing not only to secure competitive rates but to restructure their balance sheets and start the year with additional liquidity.
Msquared Capital’s findings come following the release of new research, which suggests Australian SMEs are facing mounting cash flow pressures. A recent Prospa SME Sentiment Report, conducted with YouGov, found that upcoming Payday Super reforms are expected to tighten already thin working capital buffers for many small businesses, potentially increasing demand for external funding solutions.
From 1 July 2026, employers will be required to pay superannuation at the same time as wages rather than quarterly, changing the timing of cash outflows for businesses. The report found that 41 per cent of SMEs are either unaware of the reform or do not fully understand it, while 30 per cent say they are unsure or unprepared to meet the new payment cadence.
Additionally, other surveys have shown that SMEs may be delaying investments, but remain intent on growing this year, and that business and commercial loan demand has remained robust for far in 2026.
“We’re not seeing businesses retreat – we’re seeing them recalibrate,” Volkiene said.
“Refinancing is increasingly strategic. It’s about certainty and flexibility, particularly where timing matters.”
Complex solutions
The shift comes as mortgage brokers increasingly encounter complex commercial scenarios that may fall outside the appetite of traditional lenders.
Msquared Capital said this has contributed to stronger interest from mortgage aggregators seeking to expand their commercial lending panels with specialist lenders capable of handling more complicated transactions.
“Business loans secured by residential property assets are the easiest to execute. Very few lenders have the experience needed to navigate complex commercial structures quickly or take a practical view on commercial and industrial property assets,” Volkiene said.
“Aggregators are increasingly focused on credibility and execution, not just capital availability.”
Msquared Capital, which provides real estate-backed loans ranging from $500,000 to $50 million, has recorded 30 per cent year-on-year growth. The firm recently joined Connective’s commercial panel as broker demand for non-bank commercial lending options continues to increase.
Connective head of commercial and asset finance Brent Starrenburg said brokers are increasingly dealing with more complex commercial lending scenarios.
“We’re seeing more brokers navigate complex commercial scenarios. Msquared Capital brings strong commercial experience and a practical credit approach, particularly for more complex property transactions,” Starrenburg said.
Volkiene said the growth of the non-bank sector has also seen new entrants emerge to fill gaps left by traditional lenders, increasing the importance of experience when structuring commercial deals.
“Commercial lending is relationship-driven and technically complex. Brokers are reporting long wait times on complex scenarios with their usual providers,” he said.
“In this environment, experience matters – from understanding diverse income streams and non-standard documentation, to taking a commercial approach to valuations.”
Similarly, non-bank lender Bizcap told Broker Daily that SMEs are not borrowing just to grow, but to manage timing gaps created by regulatory reform, labour obligations and tightening commercial terms, pressures which are exposing the limits of traditional, static credit models.
Starrenburg added that brokers are increasingly prioritising certainty of funding and transparent lending terms when selecting commercial lending partners.
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