Cherry-picking, box-ticking, margin-hungry banks are losing great commercial lending opportunities to non-banks, second-tier lenders and private investors, according to leading commercial finance brokers. NAB was the only big bank to increase business lending this year, while Westpac, down five per cent, led the banks in contracting total business finance this year, compared to last. And despite plenty of rhetoric from big banks about supporting business, the Australian Bureau of Statistics reports that big bank lending to business has been trending lower since March. However there are now more than thirty prominent cashed up licensed lenders in the market looking for good commercial deals that banks reject say brokers. Plus plenty of cashed up private lenders and investors contacting brokers looking for bargains and distressed assets. Some of the most competitive of the smaller commercial lenders in the market right now are the Victorian-based Banksia Financial Group and two Sydney lenders, Merchant Mortgages and Think Tank. Among the bigger second-tier lenders, brokers report that HSBC and Perpetual Trustees are also said to be hunting for good business-lending opportunities and taking a fairly commercial approach. "Today, the 90-day bill swap rate is 4.9 per cent, almost five per cent," said John Macalyk, long-time commercial broker and partner at AAA Mortgages in Sydney. "We are doing commercial loan deals for 2.25, 2.5 [and] 2.75 per cent above swap, with second tiers and non-banks. "For the borrower I just completed today, that's a rate of about 7.75 per cent, with a 25bp commission, the lender is getting 7.5 per cent today on that." That borrower came to Macalyk with a big bank offer of a 1.75 per cent margin deal. "But banks have their own base rates that are all dearer than the straight 90-day bill swap rate," said Macalyk. "That bank deal translated to a rate of 7.9 per cent today." Greg Parkins, a specialist in commercial and business finance with BCP Group Services, in Campbelltown, NSW, is also moving business to non-banks, private investors and second-tiers. "Banks are finding risk in good commercial deals." Parkins said bank sales departments want to lend, but deals are getting held back by credit departments.