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SMEs are having very little problem accessing finance to fund growth or cover cash flow concerns, according to a business advisory firm.
According to advisory firm HLB Mann Judd, access to finance is the least concern facing Australian SMEs in 2018.
“[Our] findings are consistent with data released by the Australian Bureau of Statistics which indicates that nine in 10 SMEs who sought finance were able to obtain it,” the firm said in its SME Research Report 2017/18.
“We’ve got a good relationship with the bank — funding is not a concern,” the report said, quoting one business owner.
“Access to funding is fine. We just secured a new business loan with [our bank],” another said.
In the past years, access to finance was considered as a major barrier to SME growth. However, an explosion in the number and variety of funding providers appears to alleviate those concerns, the advisors claimed.
The report also outlined that one barrier for SMEs expanding is that they are unaware of where to seek advice.
“Most are unaware that key advisory solutions are available to improve and transform their business,” the report read.
“The second common barrier is that SMEs don’t know where to find expert help. While 69 per cent of SMEs have a trusted adviser, many have never discussed their business concerns with them.”
There has been an increase in awareness that SMEs are underfunded, which is turning positively for this market, as there has also been an increase in financiers and brokers looking to fill the void.
An increasing number of banks and non-bank lenders have been targeting small business in the past year, while brokers and broker groups have been rolling out commercial offerings, too.
Further, the international Organisation for Economic Co-operation and Development (OECD) recently claimed that Australian businesses, while still heavily reliant on bank loans for funding, are gradually seeking out alternative finance providers as a means of funding expansion and overcoming cash-flow constraints.
The HLB Mann Judd report found that cash flow remains the primary reason businesses seek out short-term finance, accounting for 37 per cent of claims. This was followed by the need to replace existing machinery or equipment (28 per cent).
[Related: Online SME lender hits $10m milestone]
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