New research shows the SME sector thinks it will be harder to access business funding in the aftermath of the Royal Commission into Banking. In fact, one in five SMEs say that they already experienced Royal Commission-related funding difficulties during 2018.
The research revealed that 22 per cent said Royal Commission fallout, with the banks tightening lending conditions during a year of Commission hearings, had already made accessing funding harder in 2018, and 34 per cent 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. The research showed by far the greatest reason business owners seek new finance is to fund their expansion opportunities. It’s the key reason given by 58 per cent of SMEs.
Recently ING bank announced it will ban borrowers using their homes as security for business loans, amid a new round of tightening by lenders because of rising negative equity and tougher wholesale funding conditions. Whilst National Australia Bank (NAB) will boost the number of small business borrowers that will be extended greater protections, designed to relieve the power imbalance that favours lenders, in a move that breaks ranks with the three other big banks and the sector.
Given recent economic forecasts, there is more reason that governments and the business community must prioritise making it easier, not more difficult, for SMEs to access funds. 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.
If you need a broker to help grow your business by providing you access to additional funds or asset finance, then speak to Ozgur our SME lending expert on (02) 9897 1039 free no obligation chat about your opportunities to help grow your business.