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Recent data from the non-bank lender has found there is “less awareness” on how financing can assist SMEs beyond equipment needs.
The finance types available to small- to medium-sized enterprises (SMEs) can assist with a variety of business challenges such as slow invoice payments, cash flow management, investing in growth opportunities, and cyber security, according to non-bank business lender Moneytech’s chief business officer Mark Cameron.
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During the March quarter, Australian Bureau of Statistics (ABS) reported that business investment rose by 3.4 per cent, the financing being mainly used to invest in machinery and equipment purchases.
Mr Cameron stated while this data “is pleasing” as it indicated business confidence, it further revealed the association between finance and equipment purchasing.
“Business finance can be used for so much more than acquiring new equipment,” Mr Cameron added.
“SMEs should be looking at how they can utilise finance to be strategic and seize opportunities to benefit their business.”
According to the non-bank lender, inflationary pressures are a challenge that can be mitigated through finance, as SMEs are able to use it to “secure raw materials and ensure price and supply”.
“Using finance to approach supply chain management is a focus of SMEs with logistics and materials challenges,” Mr Cameron said.
“Different finance facilities catering to supply chain management can allow SMEs to plan for medium and long-term requirements, but need to be flexible and accommodate ongoing support for businesses.”
Furthermore, SMEs are increasingly gaining the ability to move away from traditional bank borrowing or mortgage refinancing to fund their business, according to Moneytech.
Mr Cameron further stated that SME owners should be aware that different business lending could require personal property as security for a loan.
“Business owners should do their homework, especially where property is concerned,” he said.
Green equipment financing surges for major bank
Preceding this, National Australia Bank (NAB) has revealed that business finance for green equipment increased by 59 per cent (compared to January–March 2023) in the three months between April and June 2023.
The uptick reportedly came as businesses took advantage of government incentives to reduce their carbon footprints while upgrading their equipment.
According to NAB’s data, there has been large demand for energy-efficient agriculture equipment, with financing increasing by 226 per cent, followed by an increase in solar upgrades (129 per cent) and electric vehicles (32 per cent).
[RELATED: Green equipment financing up 59%: NAB]
To learn how to become an SME client’s trusted adviser of choice and educate them on how financing could help their businesses, come along to the free SME Broker Bootcamp.
Hosted by The Adviser, our speakers will unpack the steps brokers need to take to establish a business that can best service their SME clients’ while building strong relationships with their clients.
The 2023 SME Broker Bootcamp will take place in the following locations:
· Wednesday 6 September: Rydges South Bank, Brisbane
· Tuesday, 12 September: Montage, Sydney
· Thursday, 14 September: Zinc, Melbourne
Places are limited for this free conference so book your place now by registering here.
For more information about the conference, including agenda and speakers, click here.
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