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The product extends the lender’s maximum loan term on business loans from 30 to 40 years while also adding commercial property as a security option.
The longer loan term is designed to give brokers greater flexibility when structuring business lending scenarios, with the potential to increase borrowing capacity for eligible customers.
By spreading repayments over a longer term, First Federal said borrowers may also be able to improve monthly cash flow and retain more capital within their business.
The lender added that First Business 40 is suited to small and medium-sized enterprise (SME) borrowers looking to refinance existing business debt and Australian Taxation Office liabilities, consolidate debt or fund the purchase of additional business assets.
First Federal CEO James Angus said the changes reflected the lender’s focus on giving brokers more options when navigating business lending scenarios.
“First Business 40 is about giving brokers more flexibility to solve real-world business lending scenarios for their SME clients.
“A longer loan term isn’t just about borrowing capacity. It can also materially reduce monthly repayments and free up cash flow, giving business owners more room to invest, grow and manage the day-to-day demands of running their business.”
“For us, it’s about making business lending easier and giving brokers another way to say yes to borrowers.”
Founded in 2021, First Federal is an Australian non-bank lender providing lending solutions for business and individual borrowers.
The lender currently supports more than 2,000 brokers nationally and maintains a broker net promoter score of +85.
40-year loans gain ground
A variety of lenders have also launched their own longer-term offerings in recent times.
Most recently, fellow non-bank Granite launched a new 40-year home loan for owner-occupiers and investors, but with serviceability assessed over a maximum 35-year period.
In July, AMP Bank became the first bank to offer a 40-year loan for investors that offers up to 10 years interest-only.
Last year, Great Southern Bank launched its own 40-year home loan, this time for first home buyers.
[Related: Businesses are struggling, but demand for finance keeps rising]
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