A specialist non-bank lender says brokers are a crucial platform for their business – but after new research revealed that a majority of Aussie SMEs are saying the availability and conditions of credit are hindering their growth potential, the broker platform has become even more crucial.
The Scottish Pacific SME Growth Index revealed that 62.6% of Aussie SMEs said that they are expecting an increase in revenue over the next six months. But at the same time, 61.2% said they found credit conditions as a barrier to growth while 51% said credit availability was a hindrance.
Peter Langham, chief executive at Scottish Pacific, said the Index emphasised the uphill battle many SMEs face to execute on their growth plans.
“The research clearly shows that a majority of SMEs are in growth mode, and have plans to introduce new products and services. But many SMEs seem unaware of the funding options - such as asset-based lending (including debtor finance and trade finance) - that are available beyond the traditional secured overdraft.”
Langham is now urging brokers to educate small business owners on their other options.
“Big banks don’t necessarily have the best suite of products that suit all businesses, especially when it comes to the SME sector. As the loans aren’t as large, there is limited scope for the bank to flexible – so if it doesn’t fit, it is going to be ‘no’. Whereas on a large deal, if it doesn’t fit they will make it fit. Brokers are our highest referral source and are crucial in creating awareness for SMEs about other funding options, like us. Brokers need to keep up to date with all the options and be aware of new products and lenders that come into the market. There are always new providers, like ourselves, offering niche products that are a more suitable fit for their client than the big banks.”