Broker-introduced commercial loans jumped significantly in Queensland in FY19 compared with all other states, according to FAST’s inaugural Business Lending Index report.
The new business lending report collates the volume of business loans written by FAST brokers over FY18 and FY19 to 24 lenders from its panel.
FAST collected lending data across a cross-section of lenders from its panel, including banks, non-banks, and large and small lenders, written by FAST brokers for FY18 and FY19 (September through to October).
In addition, a total of 159 business brokers from 155 businesses were surveyed online in April 2019 to provide additional on-the-ground insights into the business lending landscape in Australia.
The research found that in FY19, business lending grew by 40.5 per cent in Queensland to $1.01 billion, up from $715.9 million in FY18.
The growth was spurred by an increase in commercial property construction and investment, including a $46-billion infrastructure program initially supported through the 2018 Commonwealth Games.
The growth also follows a range of initiatives by the state government to promote growth in the region and make it easier to do business.
On the other end of the spectrum, settlements in Western Australia fell by over 30 per cent as the state continues to adjust to a post-resources boom economy. Settlements fell from $589.8 million in FY18 to $408.8 million in FY19.
Victoria saw only a modest growth of 1.8 per cent in commercial settlements, rising from $1.54 billion in FY18 to $1.57 billion in FY19. However, both NSW and South Australia experienced a slight decline.
Commenting on the findings, FAST CEO Brendan Wright said that as well as the Commonwealth Games infrastructure, Queensland “also benefited from sustained growth in both domestic and international tourism, as it increasingly becomes a key destination for visitors from Asian nations”.
Data from the Australian Bureau of Statistics shows that the number of small businesses in Queensland is continuing to increase, with small business now representing 97.7 per cent of all business.
Speaking to The Adviser following the release of the research, Mr Wright said that for broking businesses across the country, at least 30 per cent of their client base will be self-employed small businesses, if not more.
“The opportunity is to build the capability to service the business needs of these clients, if you haven’t already,” Mr Wright said.
“Consider what this means for you in your business about delivering and providing access to better advice for small and medium enterprises.”
Mr Wright also noted there are well-established and new debt advice commercial broking businesses that are also building home lending capabilities in their firms.
“So, this theme of debt advice across both business and consumer lending is key, whether it is for those who want home lending or investment property or those who want asset finance, which is something that continues to grow significant momentum,” Mr Wright said.
Find out more about the FAST Business Lending Index report and its findings in The Adviser Live: Bolstering your business with commercial finance webcast on Thursday, 14 November.
The free, live webcast, partnered with FAST and OnDeck, will outline why now is the time to maximise your business and break into SME/commercial finance.
Don’t miss your chance to find out:
And much, much more!
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.