Rapid credit approval ‘critical’ for SME lending: ScotPac

According to the Index, topping the list for SMEs was the onboarding process, with an overwhelming 95 per cent of businesses saying they want “the least amount of paperwork and administrative hurdles” – up from 90 per cent at the outset of the pandemic in March 2020.

However, the next most critical factor was ‘rapid credit approval’, with 72 per cent of SMEs nominating it as key to their decision making, up from 67 per cent in March 2020, the index uncovered.

Rounding out the top three, 36 per cent of SMEs reported “consistently high levels” of customer service were highly valued, up from 31 per cent in March 2020.

The insights in the latest ScotPac’s bi-annual SME Growth Index Report also discovered other top findings related to SMEs seeking a new loan or a refinance facility, Scotpac explained.

These included:

- Word-of-mouth referrals are an important pathway to finding a new lender for 35 per cent of SMEs

- 5 per cent of SMEs are swayed by their existing transaction banking relationships, and only 3 per cent nominated reputation as a relevant factor;

- SMEs are becoming “more discerning” when it comes to choosing a finance partner, with 85 per cent now shopping around for the right features and benefits, up from 77 per cent in March 2020.

Business finance increasingly competitive

ScotPac group executive, Client Acquisition and Asset Finance, Craig Michie, said: “The findings were a good reflection of the priorities for most Australian SMEs and the increasingly competitive nature of business finance.”

“Most SME owners and operators want to focus their time and energy on running their business, not producing copious spreadsheets for prospective finance partners,’ Mr Michie said.

“ScotPac has built its business around providing SMEs with quick approvals and the certainty that fuss-free funding will be available when they need it, so they can act quickly and confidently as opportunities arise.

“We specialise in lending to businesses and have used that knowledge and leading-edge technology to make the process as quick and easy as you will find anywhere.

“When you add the ability for brokers and their clients to deal directly with the credit approver and have ongoing the support of a dedicated relationship manager, it’s a winning formula for business owners,” Mr Michie said.

The value of current data

ScotPac’s bi-annual SME Growth Index is Australia’s longest running research report on SME sentiment towards revenue growth prospects, it explained.

The Round 17 research was conducted by East & Partners who interviewed 718 SME enterprises with annual revenues of A$1-20 million to September 2022, it confirmed.

The SMEs surveyed have operated continuously for an average of 13.9 years and manage an average of 59 full time employees, it added.

Sectors represented in the survey included Manufacturing (14.5 per cent), Business Services (14.1 per cent), Retail (11.4 per cent), Wholesale (11.0 per cent), Personal / Other Services (10.6 per cent), Construction (9.6 per cent) and 28.8 per cent all other industries including: transport, mining, Agriculture, Media, Accommodation, Finance (non-bank) and Electricity.

ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues, it explained.

[Related: Supply chain issues drive SME alternate funding support: ScotPac]