Advertisement
Powered by MOMENTUM MEDIA
lawyers weekly logo
Borrower

SMEs struggle under higher funding costs

6 minute read
The Adviser

By: Staff Reporter

Small to medium enterprises are likely to face the brunt of higher funding costs, a new report has found.

According to new research released yesterday by JPMorgan and Fujitsu, nearly half of all SMEs are paying loan rates above 8 per cent.

And these interest rates are expected to rise further, as funding costs continue to rise – spurring the big banks to hike their rates for small businesses beyond any moves in the official cash rate.

 
 

''As the cost of funding stays high for the banks themselves, they'll be looking to pass on that burden to the SME sector,'' he said. ''This means the rates for this sector will remain quite high,” JPMorgan’s Scott Manning said.

These higher rates will be a further setback for the sector, which remains fragile.

Many small and medium businesses have found it tough to secure financing over the past two years as profits have fallen away.

As such, small business confidence has been largely negative this year.

While repricing of mortgage portfolios outside the official cash rate has pricked political sensitivity, business loans fall outside the public spotlight.

default

JOIN THE DISCUSSION

You need to be a member to post comments. Become a member for free today!
You have 0 free articles left this month.
Register for a free account to access unlimited free content, or become a PREMIUM MEMBER to enjoy a wide range of benefits