Small-and-medium-sized enterprises (SMEs) are growing rapidly across Australia. Many of them are fueled by self-employed owners.
And Barry Saoud, chief executive, mortgage and commercial lending at Pepper Money, wants to help brokers tap into the momentum.
"This appetite for growth is the headline story," Saoud told Australian Broker. "The surge in SME borrowing is being driven primarily by growth ambitions. Many small businesses are seizing opportunities to expand: hiring staff, upgrading equipment and scaling after strong trading periods."
At Pepper, nearly 40% of all home loan settlements are self-employed borrowers (excluding self-managed super funds and commercial real estate.) But non-banks all over Australia are gaining ground when it comes to small-business lending.
According to the Australian Bureau of Statistics (ABS), the number of new ABNs, or Australian business numbers, more than doubled in 2025. New ABN registrations nationwide jumped 21% to 104,784 in the year leading up to August 2025, up from 436,000 between July 2023 and June 2024.
Examples of a booming small business lending market can be seen throughout the industry. Online small business lender Banjo Loans recently said its Business Loan Express applications surged by 300% in one month after expanding lending limits. Tony MacRae, chief commercial officer at Bluestone Home Loans, said roughly 60% of Bluestone's home loan lending is to individuals who fall under the self-employed umbrella. Brighten and Resimac have also reported increased numbers of self-employed borrowers.
And it follows that if self-employed borrowers turn to non-banks and specialist lenders for their business needs, they are likely to stay with them for their home and residential financing as well.
Saoud said behind the surge in SME lending are two things: "It comes down to pressure and opportunity," he said.
"The pressure is higher operating costs, tax obligations and tighter cash flow. These are pushing businesses to seek finance," Saoud said. "The opportunity is that many SMEs are borrowing to invest, whether that’s hiring, upgrading technology or expanding after strong performance."
But behind Australia’s expanding small business sector is a wave of self-employed operators, a group that often struggles to access the funding they need. That’s because many self-employed business owners simply do not fit traditional lending criteria at traditional banks, leaving them to look elsewhere for finance. Brokers who understand alternative lending options are well positioned to capture this demand.
“Small businesses and sole traders are one of the most dynamic sectors of the economy, but they’re also among the most underserved when it comes to finance,” Saoud explained. "They’ve got the ambition and income to grow, but their numbers don’t always fit the traditional lender profile.
“The real opportunity lies in helping clients tell the story behind their income," he continued. "Whether that’s through BAS business statements, or alternative documentation, brokers who can translate the reality of self-employed earnings are the ones unlocking finance that fuels business growth.”
Other examples include allowing higher loan-to-value ratios (LVRs), or extending loan terms to help with cash flow, all of which are designed to help small businesses continue investing and growing.
"Pepper’s flexible approach allows brokers to support clients through both phases: funding expansion and smoothing out financial pressures," Saoud said. "However, growth often comes with growing pains. Rising operating costs and tax obligations mean some SMEs are turning to non-bank lenders for solutions, like tax-debt funding, or business-debt consolidation, to keep cash flow healthy."
While the solutions vary, Saoud said digital tools, such as AltDoc Xpress, play an important role. These tools allow brokers, accountants and self-employed borrowers to stay organized and manage their documents.
The executive added that some small businesses are using their own properties as collateral to secure funding.
"SMEs are increasingly leveraging both residential and commercial assets to access capital. Pepper offers solutions across both," Saoud said.
"In short, borrowing isn’t just about plugging gaps; it’s about creating capacity to grow," he added. "Brokers should understand that SME lending is not a niche trend. It’s a response to real market dynamics."
