SMEs worried about tougher lending criteria

But expert partners can help them get finance, says broker

SMEs worried about tougher lending criteria


By Jayden Fennell

A commercial finance expert says SMEs are most concerned about gaining access to capital when required during a period of rising interest rates.

As the cost of goods increase and materials are harder to source, these factors are putting pressure on cash flows and margins as business owners absorb the higher costs across the board.

Broker Adam Vizza (pictured above), the managing director and co-founder of Sydney’s Vita Finance, said small-to-medium businesses need to have the right type of funding to match their business and business goals.

“With all these external pressures at the moment, SMEs need to be equipped to manage these impacts along with operational efficiencies and manage their cash flow,” Vizza said.

“At Vita Finance, we take the time to learn a client’s business from the inside out and take a holistic view of what we need to do to help them achieve the business growth they are after. Being transparent with your clients when becoming their finance partner is key.”

Vizza and his cousin Daniel Vizza, who both have backgrounds in banking, launched Vita Finance in 2021 as the cousins shared the same dream for many years of one day going into business together.

“I have 15 years’ experience in the finance industry and I started my career in retail banking before moving into commercial lending in 2011,” Adam Vizza said.

“I held senior roles with NAB and St George in both the SME and commercial/corporate segments before Daniel and I launched Vita Finance last year.”

Vizza said it was no secret that the commercial investment market has been hit hard over the past two-and-a-half years.

"There is a lot of volatility at the moment with inflation and interest rates rising, add to that external challenges which are putting pressure on commercial market valuations,” he said.

“Rate rise after rate rise means yields are being squeezed, so there is some downward pressure on valuations, resulting in hesitation from lenders to leverage up on their valuations which can make access to funding a little harder in some cases.”

Vizza said there was still some great opportunities for clients if they had the right support from a finance partner.

“Having access to a client’s long-term view across their financial journey and knowing the objective of a specific purchase is a massive advantage,” he said.

“We need to understand the why behind the numbers and structure the finance in a way that benefits all parties.”

Vizza said when things began tightening in the lending space, SMEs could rest assured that lending appetite for the right business “steps up” and a shift in focus moved to quality over quantity.

“This means as a finance provider, we can have a tangible conversation with clients to a suite of different lenders. We are finding more banks are knocking on our door more than ever to see what they can do for our clients.

“It is a refreshing approach when a lender comes to us and offers to help our clients rather than the other way around. The clients are the real winner here because they have more choice of who wants to do business with them.”

Vizza said knowing your self-employed clients’ circumstances and possessing a deep understanding of credit across key segments was very important.

“As finance professionals, we need to be effective and have the tools to digest a complex situation. We are our clients’ trusted advisers and it is our job to help them achieve the outcome they are chasing,” he said.

“This industry is filled with great people who understand finance and go the extra mile for their clients. It is important to know this industry is shifting, but you do not have to navigate it alone.”

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