ANZ offers $1bn cash injection for small business - but will it make a difference?

by Mackenzie McCarty10 Apr 2013

ANZ’s announcement that it will be lending $1bn over the next 12 months to new businesses as a ‘demonstration of its commitment to Australia’s small business sector’ has been met with a splash of cynicism from one commercial broker.

The major lender says its motive for the cash injection follows research indicating 39% of new small business owners believe getting access to finance through banks is difficult, while 69% have cut back on personal expenses when the business is low on cash.

 ANZ general manager small business banking, Nick Reade, says the bank understands that the first few years of running a small business can be challenging.

 “A lot of new small business owners think that it’s only big businesses that get loans from the banks, but that’s not the case. In the last year, we approved more than seven out of every 10 lending applications from new small businesses.

But Commercial Brokers Australia Pty Ltd spokesperson, Gary Davis, was sceptical of the move.

“I think ANZ may be attempting to improve its image in the SME market due to adverse publicity around recent legal and fee cases and winding up of some businesses post-floods and GFC.”

That said, Davis says the end could justify the means – so long as the $1bn offer is administered effectively.

“Active withdrawal from some segments of the market due to PPSA and some untested aspects of this legislation have left lenders unsure as to their security position on all other securities excluding property as a whole.  This has impacted on bank lending that was previously deemed ‘unsecured’, or against ‘going concern’, or against chattels and stock - and effectively shrunk access to capital to small business.”

“Unless ANZ are going to actively lend to business and against business assets other than real estate security,” says Davis, “then little overall shift in their assessment and advances will occur to that which it has shrunken to now.”