Newly released SME Growth Index results

Twenty-two percent of survey respondents said Royal Commission fallout, with the banks tightening lending conditions during a year of Commission hearings, had already made accessing funding harder in 2018.

34% expect funding will be harder to access in the future.

The research was conducted from November 2018 to late January 2019, after the release of Commissioner Haynes’ interim report but before the release of the Royal Commission’s final recommendations.

Scottish Pacific CEO Peter Langham said it was vital that any changes introduced as a result of the Royal Commission recommendations do not negatively impact on the flow of funding in the SME sector.

“The research shows by far the greatest reason business owners seek new finance is to fund their expansion opportunities. It’s the key reason given by 58% of SMEs,” Mr Langham said.

“So, the easier it is for SMEs to get funds, the stronger the Australian economy will grow.

“Given recent economic forecasts, all the more reason that governments and the business community must prioritise making it easier, not more difficult, for SMEs to access funds.

“This is also a key reason why the Federal Government should reconsider the broker fee changes recommended by the Royal Commission. Good brokers play a vital role by helping time-poor business owners find the right product and provider that best suits their needs, allowing the business and the economy to grow,” he said.

SMEs look beyond the banks

Mr Langham said SMEs need fast and convenient access to money and if they are rejected by a bank due to tighter lending restrictions or lack of property security, they should know there are credible alternatives.

“Many SME owners have been rusted on to the banks out of habit. Choice is good for SMEs, and there are many alternative finance options they now have available, as long as they make an informed choice knowing the benefits and risks of the products.”

Independent research by East & Partners, commissioned by Scottish Pacific Business Finance, polled 1257 respondents, the owners and senior managers of SMEs across all states and key industries. For a free copy of the September 2018 SME Growth Index Report, enter your details here. The SME Growth Index is produced biannually, and the next report will be available in March 2019.