As if small and medium-sized businesses weren’t already facing an uphill battle this year; now it turns out that more than a quarter were knocked back when they applied for finance in recent months. Here’s how we can help.
The latest Sensis Business Index – which surveyed 1,015 businesses in the first week of August – shows 26% of businesses that applied for finance over the past three months were knocked back.
The figure was worse in the bush with 37% of those applying in regional areas declined, compared to 25% in cities.
Additionally, fewer and fewer businesses are applying for finance.
The percentage of businesses that applied for finance dropped to 13%, down from 16% in March and 17% in December 2019.
Getting some help?
Here’s what small business lender OnDeck has to say in regard to its recent research on the importance of having a trusted professional to speak to while applying for finance.
“Our survey clearly highlights that SMEs place significant value on the input of a broker in the commercial finance process,” says Robbie Fidler, OnDeck Australia national broker channel manager.
Additionally, SME lender Scottish Pacific recently highlighted the important role brokers can play in helping businesses prepare for that September “cliff” you’ve probably heard about.
“When COVID-19 hit and JobKeeper and other initiatives were put in place, September seemed a long way away – it’s only a week away now, and small businesses need to act,” says Scottish Pacific’s General Manager for Victoria, Jane Starkins.
“We are having regular conversations with accountants and brokers who realise their clients need funding in place to pay expenses they have been deferring, including rent, asset finance, PAYG, superannuation and payroll tax.”
Ms Starkins adds that now is an ideal time for business owners to find new funding paths that harness the value of assets already in their business, such as their sales invoices or plant and equipment.
“Business owners are reluctant to extend their borrowings. They are busier than ever trying to navigate the COVID-19 environment, which means accountants and brokers have a crucial role to play in making them aware of other funding solutions,” she says.