The ASBFEO is seeking feedback on the “content and usefulness” of the Business Funding Guide, a free guide launched to help financial services providers navigate and offer a range of SME funding options.
The Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, is seeking feedback on the recently released Business Funding Guide, an “industry first” guide created to help brokers, accountants, bookkeepers and financial advisers understand the plethora of SME financing options available.
The first edition of the guide was launched by the ASBFEO in partnership with Scottish Pacific Business Finance in July of this year to “tackle the access-to-funding crisis” being faced by SMEs.
It came with a supplementary guide for SMEs that aims to help small businesses become “finance fit” in order to give them their best chance at securing the funding they need.
While the ASBFEO and Scottish Pacific developed the initial guide in consultation with several key mortgage industry stakeholders, feedback is now being sought from the wider market to finalise it.
“We welcome feedback on the content and usefulness of the guide from all interested parties,” Ms Carnell said.
“At the moment, this is a living document that can be amended and improved based on the feedback we get, with a final version of the guide to be available later this year.”
Scottish Pacific CEO Peter Langham added: “There are so many variables in running a small business, but the one constant is that SMEs need funds to grow.”
“By incorporating broad feedback, the guide will be able to really engage businesses and their advisers about a wide range of bank and non-bank funding options and give them the tools to find the right one for them.”
Critical time for SME lending
The Business Funding Guide comes at a critical time for SME lending, according to the ASBFEO.
“The overwhelming feedback from the small-business community is that a lack of access to funding is their biggest barrier to growth,” Ms Carnell said.
“The Australian Banking Association (ABA) has even acknowledged that small-business loan applications have fallen by 33 per cent since 2014.”
The guide is also not alone in its attempt to “tackle the access-to-funding crisis” being faced by SMEs.
In light of falling small-business loan applications, the ABA and the Council of Small Business Organisations Australia (COSBOA) have also launched a website providing a range of resources for small-business owners, including a step-by-step guide to applying for finance.
Financingyoursmallbusiness.com.au contains templates, checklists and other information pertaining to creating a business plan, using a trusted adviser, and applying for small-business finance.
Ombudsman Carnell said that while the Business Funding Guide covers a wide range of SME funding options for financial advisers, the ABA’s guide is a useful resource for small-business operators considering obtaining finance through a mainstream financial institution.
The guides come amid a period of confusion for SMEs around their options for finance, uncertainty surrounding their borrowing capacity and correct loan documentation, and with falling levels of trust in banks, according to research conducted by Judo Bank.
According to the SME bank, the funding “gap” for SME businesses with a turnover of up to $20 million has increased in 2018-19 from $83 billion to $90 billion.
The bank’s SME Banking Insights Annual Report also revealed that nearly half of SMEs are looking to borrow in the next 12 months but have a limited understanding around how much they could borrow and what documentation would be required from the lender.
Hannah Dowling is a journalist for The Adviser and Mortgage Business.
Prior to joining Momentum Media, Hannah worked as a content producer for a podcast catering to property investors. She also spent six years working in the real estate sector at a local agency.
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