Quick answer
The big four (Commonwealth Bank, Westpac, NAB and ANZ) offer the widest product range, online unsecured loans, large branch networks and deep balance sheets. Challenger banks, such as Judo, Macquarie, Bendigo and BOQ, are smaller and often more specialised, sometimes offering a dedicated banker or a sharper appetite for particular industries. All are APRA-regulated banks, so both are worth asking before you turn to non-bank lenders.
Key points
- Every big four and challenger bank is an APRA-licensed deposit taker; the difference is size, focus and service model
- Big four banks now run online unsecured business loans that compete directly with fintechs
- Challengers tend to win on relationship banking and on niches the majors are lukewarm about
- Check ownership: St.George and Bankwest sit inside big four groups, and ANZ has owned Suncorp Bank since July 2024
- Being declined by one bank says little about the next, so a second bank is worth trying before going non-bank
- The big four
- CBA, Westpac, NAB, ANZ
- Regulator for both
- APRA (prudential) and ASIC
- Banking Code small business cap
- $5m total borrowings
- Suncorp Bank owner
- ANZ, since 31 July 2024
Mention borrowing for a business and most owners picture one of four logos. That instinct is sound: the Commonwealth Bank, Westpac, NAB and ANZ lend more to Australian business than anyone else, and when you fit their criteria they’re frequently the cheapest place to borrow. But “bank” doesn’t stop at four. A layer of smaller banks, loosely called challengers, compete hard for business customers, and some of them were built for nothing else.
This page compares the two groups fairly, then shows how to use both before you think about lenders outside the banking system.
Who sits in each group?
The big four are the Commonwealth Bank (including Bankwest), Westpac (including St.George, BankSA and Bank of Melbourne), NAB and ANZ. Since 31 July 2024, ANZ has also owned Suncorp Bank, bringing about 1.2 million customers into the ANZ group according to ANZ’s announcement. If you bank with one of those brands, you’re dealing with a big four group, even if the logo on the branch says otherwise. Our situation page on big four bank alternatives explains why that matters for credit appetite.
Challenger banks is an informal label for everyone else with a banking licence. In business lending, the names owners meet most are:
- Judo Bank, a business-only bank whose lending, according to its website, starts at $250k, with each borrower assigned a relationship banker. See our Judo Bank profile.
- Macquarie Bank, which focuses on selected industries such as accounting, legal, healthcare, real estate and technology. See Macquarie Bank.
- Bendigo Bank and Bank of Queensland, long-standing banks with strong regional footprints and full business product ranges. See Bendigo Bank.
- Customer-owned banks and mutuals, several of which now offer business loans too.
Every one of these, big four or not, appears on APRA’s register of authorised deposit-taking institutions and operates under the same prudential rules.
Big four and challengers compared
| Big four banks | Challenger banks | |
|---|---|---|
| Product range | Widest: accounts, merchant, overdrafts, term loans, equipment, trade, invoice finance | Narrower; some focus on lending, others on particular industries |
| Small unsecured loans | Online products, roughly $5k up to about $250k depending on the bank | Varies; some offer small unsecured loans, some start lending at $250k |
| Service model | Online for small loans; a business banker for larger or secured needs | Often a named relationship banker; some work mainly through brokers |
| Branch network | Extensive, nationally | From national to largely regional, or none at all |
| Credit appetite | Broad but standardised | Can be sharper in chosen niches, cooler elsewhere |
| Speed | Fast for online products; weeks for complex deals | Similar; depends on deal size and banker capacity |
| Large facilities | Very large balance sheets | Smaller hold limits, though still substantial |
| Regulation | APRA and ASIC | APRA and ASIC |
When does a big four bank win?
- You want everything under one roof. Transaction accounts, card terminals, payroll, foreign exchange, trade finance and a loan from the same bank simplifies life, and an existing relationship can help with pricing.
- A small, quick unsecured loan. As at October 2026, each of the four runs an online unsecured business loan. NAB’s QuickBiz, for example, covers $5k to $250k for businesses with an ABN held 12 months and at least $75k turnover, according to its website. For a business that fits, these products compete head-on with fintech lenders, often at a lower total cost. Our NAB profile has the detail.
- Large or complex needs. Acquisitions, multi-site property and big equipment programmes suit a bank that can hold large exposures and offer specialist teams.
- You value national coverage. Branches in most towns and support across every state.
When does a challenger bank win?
- You want continuity with one banker. Challengers often sell relationship banking as their point of difference: a named person who knows the business and stays with it.
- Your industry is their focus. A bank that specialises in professional practices, healthcare or regional business may understand your cash flow better than a generalist credit model.
- The big four policy doesn’t quite fit. A different view of your security, your industry or a growing but lumpy turnover can change the answer. Our guide to a bank saying no for no clear reason helps you work out what to fix before trying a second bank.
- You’re in a region they know well. Regional banks can be more comfortable with local agriculture, tourism or property than a city-based credit team.
Tried one bank already and heard no? Let us look at the file, and we’ll tell you whether a different bank is worth asking.
How do cost and speed compare?
Neither group is consistently cheaper. Big four banks can price very sharply for strong customers they want to keep, and their online unsecured loans are often less expensive than fintech equivalents for businesses that qualify. Challengers may price aggressively to win business in their target industries, and less so outside them. The RBA has also noted that business lending margins narrowed after 2023 as competition increased and APRA lowered the capital banks must hold against SME loans, which has helped borrowers at banks of every size.
Speed is about the product, not the logo. A small online loan at either can be decided within a day or two. A secured facility of several hundred thousand dollars usually takes weeks at any bank, because of valuations, legal work and credit review.
The protections are similar too. From 28 February 2025, the updated Banking Code of Practice has meant that subscribing banks treat a business with up to $5m in total borrowings as a small business, with protections around guarantors and financial difficulty. Ask any bank whether it subscribes.
A worked example
Here’s an illustrative case, not a real client. A Toowoomba agricultural machinery dealer, twelve years trading, wants $1.2m to buy the business next door and expand its workshop. Its big four bank likes the history but wants more security than the owners can offer, and proposes a smaller amount.
The owners ask a challenger bank with a regional and agribusiness focus. Its banker visits the site, understands the seasonal swings in the dealer’s sales, and is comfortable taking the target business’s freehold yard as part of the security. Its offer funds the entire $1.2m, at a total cost the owners compare line by line against the reduced big four offer.
In another case, the same comparison would favour the big four, for example if the dealer needed trade finance to import machinery, where a major bank’s international network and product range are hard to match. The lesson is to ask both, not to assume.
Decision checklist
- Who actually owns your bank? Check before you treat a second brand as a second opinion.
- Is the need small and simple? Try your existing big four bank’s online product first.
- Is it large, specialised or industry-specific? Ask a challenger with that focus as well.
- Do you want a named banker? Factor service model into the choice, not just price.
- What’s the total cost in dollars of each offer? Fees, security costs and the full term.
- If both banks decline, why? If it’s tax debt, defaults or urgency, a non-bank or private lender is probably the next stop. Our bank vs non-bank comparison covers that step. You can also gauge your limits first with the business borrowing power calculator.
Big bank, small bank, or neither?
We’re fans of banks, and we’ll say so when one is the right call for your business. When neither the majors nor the challengers can help in time, that’s where we do most of our work. The form takes about a minute, and simply enquiring has no effect on your credit rating. You won’t find your details passed around to a whole market of lenders. Someone from our team reviews what you’ve written and calls you directly. Tell us honestly about turnover, security and any bank decisions so far, and we can steer you to the most promising next door straight away.
Frequently asked questions
What counts as a challenger bank in Australia?
There's no official definition. The term usually covers banks outside the big four, from long-established regional banks like Bendigo and BOQ to newer specialists like Judo Bank, plus Macquarie and customer-owned banks. They're all licensed by APRA as authorised deposit-taking institutions.
Are challenger banks riskier to borrow from?
As a borrower, your risk is mostly about the contract, not the bank's size. All Australian banks operate under the same APRA prudential framework. What can differ is service continuity, product range and how each bank handles a business in difficulty, so read the facility terms carefully.
Is a challenger bank cheaper than a big four bank?
Sometimes, sometimes not. Pricing depends on the loan, the security and how much the bank wants your business. Big four banks can be very sharp for strong customers, while a challenger may offer better terms to win a business in its target industry. Compare total dollars, not headlines.
If a big four bank declines me, will a challenger say yes?
It's possible, because each bank sets its own credit policy. A challenger with an appetite for your industry, or a different view of your security, may approve. If the decline was for tax debt, a recent default or a very short history, though, most banks will see it similarly.
Do challenger banks follow the Banking Code of Practice?
Many do. The code applies to banks that subscribe to it, and it extends small business protections to businesses with up to $5m in total borrowings. Ask any bank whether it's a subscriber before you sign.