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Accessing Workable Small Business Loans

The December 2020 Report from the Australian Small Business and Family Enterprise Ombudsmen (ASBFEO), highlights the significance of small business to the Australian economy and some of the key challenges faced by the sector. Challenges that may be met with easier access to affordable finance solutions. The report qualifies its statements by stating that it is based on statistics gathered prior to the devastating impacts of the 2019/20 bush fire season and the coronavirus pandemic.

The Australian Bureau of Statistics (ABS) definition of a small business is one that employs less than 20 people or has a turnover of less than $10 million. There are over 2 million small businesses in Australia, employ nearly 5 million, and account for 41% of the workforce. Find out more here.

The report quotes statistics from the 2016-2018 period which show that while income for SMEs increased, the net income of these businesses remained quite flat. This indicates significant cost pressures. It also states that the survival rate for small businesses is significantly lower than for large operations. Another interesting and possible contributor to some issues faced by SMEs is that in 2016, 40% of small business owners were in the 45-59 year age range.

It goes on to claim that small businesses don’t get the credit deserved for innovation and notes many other positive aspects of the sector. But it is when it comes to sourcing loans that small businesses can face significantly differing scenarios than their larger counterparts. Business Finance is acutely aware of the challenges for SMEs in regard to sourcing workable loans and we offer pathways to assist our customers to achieve a positive outcome.

Business Loan Pathways

A particular section of the ASBFEO report further emphasises what most small business owners know only too well – late payers are a big problem. It identifies cash flow issues due to late payments and suppliers imposing their own extended terms, which is a major cause of insolvency.

Small Business Finance Options

Small businesses typically do not have the backup in assets and resources like large businesses possess. Some small business owners may have secured much of their business set-up and running costs against personal assets, such as homes or other property. View our small business loan options.

Financial Resources for Medium To Large Businesses

Medium to large corporates often has personal business bankers and seemingly direct and immediate access to bank funding and finance. For small businesses, too often the process of dealing with banking loan guidelines and meeting strict criteria is simply too hard. They often don’t have the time to devote to the process or they just don’t tick all the boxes.

Commercial Finance Takeaway Points

So what is the way forward? Despite this doom and gloom there can be a light at the end of the tunnel. Establishing a good working relationship with a qualified, fully licensed business finance broker with specialist skills in commercial finance can be key to opening pathways to affordable finance solutions.

Brokers have a distinctly different role from a business accountant. The accountant has a valuable role in dealing with the business accounts and many provide an essential source of advice and information to guide business owners in many areas. The business finance broker role is to source and structure loans for the small business.

Finance Broker Services

The services of business finance brokers are not the exclusive domain or privilege of a large corporation to source massive structured finance deals. The services of most brokers are available to all types and sized businesses. In fact, small businesses stand to realise even more significant benefits than large companies, relatively speaking.

When selecting your finance broker, here are a few tips:

  • Ensure the broker specialises in business loans and commercial finance.
  • Review the broker’s accreditations. Accreditations signify that the banks and lenders have given approval for that broker to work with them to source loans for their business customers. A broker with many accreditations is a sign that they have the capability to source you the cheapest finance from across a vast range.
  • Ensure the broker has non-bank lender and specialist lender accreditations. Non-bank lenders are often more flexible than banks and can be a great source for hard to access loans such as low docs finance, bad credit loans, and specialist commercial finance products. Many of the types of loans that small business requires.
  • Check the broker’s certifications and ensure they are fully licensed and compliant with the relevant regulatory authorities.
  • Ensure their business model works for you. Having online services and resources can be a big plus for busy small business owners. Being able to apply online, use online an online calculator for business loans, and other financial tools in your own time can be extremely helpful

Finance brokers can save business time and money. Opening up channels to workable finance that are not readily available directly by the business. Channels directly accessed through their industry-only contacts. They save you money by negotiating on interest rates and loan terms to secure businesses the cheapest loan deals, regardless of the size of your business. View our business finance interest rates here.

Business Finance offers a complete portfolio of loans and finance to suit both general and specific business requirements. Professional finance services make accessing workable small business loans an easier process and a reality for many business owners.

Contact 1300 000 033 to discuss your requirements.

DISCLAIMER: THE SPECIFIC PURPOSE IN PROVIDING THIS ARTICLE IS FOR GENERAL INFORMATION ONLY. IT IS NOT INTENDED AS THE SOLE SOURCE OF FINANCIAL INFORMATION ON WHICH TO MAKE BUSINESS FINANCE DECISIONS. BUSINESS OWNERS WHO REQUIRE ADVICE OR GUIDANCE AROUND THEIR SPECIFIC FINANCIAL CIRCUMSTANCES ARE RECOMMENDED TO CONSULT WITH AN ADVISOR OR ACCOUNTANT. NO LIABILITY IS ACCEPTED IN REGARD TO ANY MISREPRESENTATIONS OR ANY ERRORS RE ANY DATA, SPECIFICS, POLICIES AND OTHER INFORMATION AS SOURCED FROM OTHERS.

 

 

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