SMALL BUSINESS LOANS IN AUSTRALIA: SHOULD YOU SEEK FINANCE FROM A BANK OR AN ONLINE LENDER?
Considering the small business sector employs nearly half the national workforce and contributes around $380 billion to Australia’s GDP , it’s easy to see why it’s frequently referred to as the ‘engine room’ of the economy.
Like all engine rooms, the sector requires sufficient fuel – in this case, working and growth capital – to not only keep running but also accelerate. However, poor access to capital remains a significant barrier to small businesses, accounting for a majority of failures in the sector.
Part of the reason is that banks are reluctant to lend to small businesses in circumstances where the borrower doesn’t have bricks-and-mortar security – especially if a short-term loan is sought. As Kate Carnell, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), has previously told Dynamic Business, it is simply more profitable for banks to lend against properties than it is for them to approve an unsecured loan against strong business cases and healthy cash flows . Read more
James Harkness - Dynamic Business - 3 April 2018