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Cost pressures and access to capital are among the top concerns for brokers’ clients, Shift research shows.
Brokers have flagged the biggest challenges facing their clients as the need to manage cash flow, navigate cost pressures, and access capital for growth, according to Shift research.
The non-bank lender surveyed 214 commercial brokers in April and found that rising costs continue to worry business owners.
The need to manage cash flow was cited as the top concern, with brokers also saying that their business clients were challenged by cost pressures and access to capital.
However, brokers were fairly optimistic about their ability to cement themselves as trusted advisers to these clients and help them find a solution.
In fact, the Shift survey found that brokers believed the biggest opportunities to grow their businesses were from exploring new sectors to focus on and growing long-term relationships to help clients while creating revenue.
Brokers also listed rising client optimism and the potential for increased capital leverage if interest rates drop further as major opportunities.
Shift said that commercial brokers were focusing more on helping clients navigate uncertainty and map out their financial needs to leverage capital opportunities.
Andrew Wagg, Shift’s head of broker sales, said that he had seen many brokers look beyond the next six months to help support clients.
“Sectors such as civil and trade services are showing ongoing momentum, with many brokers coming to us for repeat business with clients in these areas,” Wagg said.
“These brokers understand their clients’ businesses, considering both past performance and future growth, while also anticipating potential challenges.”
Will Overman, director at brokerage Magnolia Lane, said brokers were increasingly aiming to support businesses in the longer term.
“The last year has thrown up challenges for SMEs and as a result for commercial brokers,” Overman said.
“Our view has been to maintain a whole-of-business approach, to balance a client’s immediate capital needs with their business plans over the coming years.
“This is in the best interest of our clients, and results in repeat business for us and relationships that stand the test of time and whatever the economy throws our way.
“With the end of the financial year approaching, naturally we’re seeing momentum from businesses looking at how to leverage instant asset write-off, but our view is to ensure that any purchases and capital decisions made now will benefit them in the long term.”
Earlier this year, major lender Commonwealth Bank of Australia (CBA) released research that found nearly 80 per cent of small- to medium-sized businesses (SMBs) have experienced cash flow issues in the past year.
When helping clients navigate cash flow pressures, Valiant Finance broker Jacob Morris told The Adviser that simplicity was key.
“The goal here is simple: build a safety net and know it’s there if you need it,” Morris said.
“Business owners are busier than ever and need to operate with maximum efficiency to make their lives as easy as possible.
“When presented with options, they want complete transparency to make quick decisions. Given current market conditions, my clients are often most interested in overdrafts, lines of credit, debtor and invoice finance, as well as term loans with favourable early payout options.”
A growing number of small and medium-sized enterprises are relying on brokers for finance, according to new data from non-bank lender Lumi.
You can find out more about how brokers are supporting SMEs with finance products and credit advice in the May edition of The Adviser magazine, out now.
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