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Two-thirds of SMEs think about the majors when it comes to sourcing business finance, but a quarter has been knocked back by them, according to the SME lender.
Small-business lender OnDeck Australia has flagged a disconnect between the types of lenders that small-business owners think of when it comes to sourcing commercial finance and the types of lenders that actually approve these loans.
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The March 2023 Brand Intelligence – SMEs on Business Lenders Survey from Agile (formerly known as Momentum Intelligence) found that 66 per cent of small businesses think of Australia’s big four banks (ANZ, CBA, NAB, and Westpac) when sourcing commercial finance.
However, OnDeck’s research has revealed that a quarter (25 per cent) of small businesses have had their finance applications rejected by a major bank.
This figure rose to 38 per cent for small businesses that have been in operation for less than five years.
According to the SME lender’s survey, a quarter (25 per cent) of small businesses that have applied for bank finance in the past believe they had been ‘negatively impacted’ by the time taken to secure finance.
Chief among these ‘negative impacts’ were ‘delays in the delivery of products’ (43 per cent), a ‘slowing or halt of normal business operations’ (37 per cent), and ‘delays in engaging new staff’ (11 per cent).
Noting the disparity, Cameron Poolman, chief executive of OnDeck Australia, said brokers were well placed to better educate SMEs on how and where they can access finance.
“The major banks do a great job of promoting their brand. What they are not so good at is meeting the needs of Australia’s small-business community and brokers need to be aware of how this can impact lending outcomes for their small-business customers,” he said.
Mr Poolman flagged that OnDeck was “a specialist small-business lender” that “understands the need for a streamlined application process and rapid response time”, flagging it has a fast-tracked Lightning Loans product that can provide business borrowers with up to $150,000 in two hours.
“We know that time is of the essence for both brokers and small-business owners,” the OnDeck Australia CEO said.
“Time spent on paperwork-heavy applications is time away from the business and a protracted approval process can mean lost opportunities for small enterprises.
“That’s why OnDeck helps brokers and their small enterprises skip the ‘slow no’ of the major banks and gain access to the funds they need sooner.
“It helps a broker deliver outstanding customer service and allows their small-business clients to tick off their goals for growth.”
Come along to the free SME Broker Bootcamp to learn more about how you can help SME owners access finance and become the trusted adviser for SME clients.
Hosted by The Adviser, our speakers will unpack the steps brokers need to take to build the right business model to learn the ins and outs of SME lending, and equip them with the knowledge and skills needed to build strong relationships with them.
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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