The head of one of Australia’s largest aggregators has told Australian Broker that the group is placing renewed focus on business lending, as thousands of SMEs struggle under current market conditions.
Australian Finance Group CEO, David Bailey explained, “As we helped bring competition into the residential mortgage market, we want to do exactly the same in the small business market, which history proves has been under-banked and needs support.”
His comments are well-timed as Scottish Pacific’s latest SME Growth Index revealed 58% of small businesses need new finance to fund their expansion opportunities.
However, while the demand for finance exists, the solutions to meet it don't and 22% reported difficulties accessing funding since the royal commission. Further, one in three SMEs expect this trend to be more pronounced in future.
In response, AFG has boosted the lenders on its business panel from four to more than 20 in only 12 months.
“These lenders are helping brokers help small businesses,” said Bailey.
“AFG has always been about providing competition and choice, and now we’re just looking at a different market to do more of the same.”
Supporting its network of more than 2,900 brokers to adopt more business clients, the group is also expanding its technology and training.
“We’re continuing to invest in our technology platform, as well as our training platform to keep brokers up to date around changing requirements. That’s something we’ve always done, and will continue to invest in it as part of our value proposition,” said Bailey.
“What’s gotten brokers to where they are right now is their ability to service and look after customers. In periods of uncertainty and periods where credit institutions have been less consistent, customers need brokers even more.”
According to Bailey, this steadfast and reliable performance from mortgage brokers over recent years is “paying dividends” now, as the industry engages regulators and politicians in a crucial dialogue.
“Uncertainty drives a level of inertia. To break that, you need to have conversations to ensure best outcomes. Without those, no one is fully aware of what the long-term effects could be,” said Bailey.
“Fortunately, we’re starting to see that industry consultation. We’re starting to see that engagement with stakeholders improving,” he concluded.