Why brokers and non-bank lenders are key to SME growth

The latest insights from ScotPac’s SME Growth Index Report highlight more than ever the need for businesses to talk to their brokers and work with non- bank lenders to help optimise their cash flow.

From 1 July, Australia’s minimum wage increased by 3.75 per cent, topping $24 an hour, and the superannuation guarantee inched up to 11.5 per cent. Unsurprisingly, nine in 10 Australian SMEs predict these changes will negatively impact their cash flow, with 70 per cent identifying cash flow constraints as their primary barrier to growth.

Rising business costs have also heightened concerns about insolvency. More than 11,000 Australian businesses entered external administration for the first time in 2023–24, 39 per cent higher than the previous year. Concerningly, a quarter of SMEs surveyed last month told ScotPac that the failure of one major client or supplier would put their business at risk of closure.

Another significant concern for SMEs is the Australian Tax Office’s pursuit of approximately $55 billion in outstanding tax debts, two-thirds of which are owed by SMEs. This has led to a surge of new payment plans in recent months – more than 100,000 in May alone – between the ATO and Australian businesses.

Against this backdrop, the celebrated resilience and optimism of Australia’s SMEs are on full display. A healthy 60 per cent of SMEs intend to invest in their business in the six months to March 2025, with supply chain management and funding the lead priority. This highlights the immense opportunity for brokers and non-bank lenders alike.

SME business funding plans have transformed in the past decade, particularly post-pandemic. A record 54 per cent of SMEs now plan to use non-bank lending to fund new business investment, a dramatic shift from 2014 when just 7 per cent said they intended to use a non-bank lender. Ninety per cent of SMEs are now open to partnering with a non-bank lender, with ease of onboarding and speed of funds delivery the main drivers.

ScotPac offers an unmatched suite of fast, scalable funding products ranging from $10,000 up to $150 million. From simple to complex, small to large, start-up, growth, or turnaround, we have a funding solution. We also back the potential of the businesses and owners we support, which means in most cases, the family home is not required as security.

Our award-winning Invoice Finance product lets businesses tap into the value of unpaid sales invoices, putting them back in charge of their cash flow. Cash Line, our newest product, operates like a fixed line of credit up to $250,000. And Boost Business Loan, a popular and convenient online loan, provides SMEs with access to funding from $10,000 and $500,000.

Getting the right professional advice and funding solution is essential for business success in a challenging environment. The demand for the expertise that brokers bring to the table will continue to rise in line with the rapid increase in SMEs looking to partner with specialist non-bank lenders like ScotPac. We look forward to continuing to work with our valued network of brokers to help more SMEs grow and succeed.