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A new report has revealed six out of 10 small businesses would consider using a broker to “access the broker’s advice or opinion”, given the current economic market.
The new research by OnDeck Australia found an “overwhelming majority” wherein 86 per cent of small businesses would return to their broker for support in organising finance for the future.
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The survey, which included more than 300 small business owners Australia-wide, found six out of 10 (60 per cent) would consider using a broker for their future financing needs — a figure that rises to 72 per cent of small businesses in Queensland.
OnDeck said the research “confirms a high level of demand for brokers’ service across the nation’s small business community”.
The survey shines a light on the variety of benefits a broker can offer, such as 59 per cent indicated that the key driver of returning to a broker would be to “access the broker’s advice or opinion”, while 41 per cent wanted to get the “best price possible on finance”.
In addition, 31 per cent said they would use a broker based on the “lack of time to independently arrange” finance.
The findings come as OnDeck recorded 43 per cent growth in loan originations from the broker channel in the first six months of 2022 alone.
CEO Cameron Poolman said the research highlights opportunities for brokers who want to expand into small business lending.
“When six out of 10 small businesses say they are keen to use a broker, there are clearly exceptional opportunities for brokers to diversify into commercial finance,” Mr Poolman said.
He added it was a “big pat on the back for Australia’s brokers” who were delivering real value to the nation’s small businesses.
“I would encourage small business owners who have not partnered with a broker to discover just how streamlined the process of applying for, and securing, business finance, can be when you have a broker on your side.”
It comes at a time when the Reserve Bank of Australia’s (RBA) latest Financial Stability Review revealed that inflation pressures, labour shortages, and supply disruptions have dented profitability adding pressure on small and medium-sized enterprises (SMEs) still recovering from the pandemic.
The RBA noted this cohort appears to be particularly vulnerable when the ability to raise their prices to offset input costs was limited.
“Currently, unprofitable SMEs appear particularly exposed, as they tend to be more indebted than profitable SMEs — and are therefore already more vulnerable to rising interest rates,” the RBA stated in the review.
OnDeck and the RBA’s findings have come ahead of The Adviser’s SME Broker Bootcamp, which will outline how brokers could capitalise on the demand for their advice from SME clients by diversifying their brokerages into SME lending.
Brokers will hear about the financial gains and risk/reward payout of diversifying and how long it could take, the skills required to successfully tap into SME lending, and the key to producing quality lending submissions to meet clients’ funding needs.
The bootcamp will delve deeper into the challenges facing businesses in the current economic environment, while brokers who have implemented diversification strategies into their business will share practical advice on how others could become a trusted adviser for SME clients.
It will be held in the following locations:
- Thursday, 17 November: Waters Edge, Portside Wharf, Brisbane
- Tuesday, 22 November: Parkroyal, Parramatta, Sydney
- Thursday, 24 November: Crown Promenade, Southbank, Melbourne
Click here to register for free and make sure you don’t miss out!
For more information, including agenda and speakers, click here.
[Related: https://www.theadviser.com.au/borrower/43536-rising-variable-rates-pinch-unprofitable-smes-rba
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