ISCOVER
More than half of Australia’s small- to medium-sized enterprises (SMEs) intend to fund new investments with a non-bank lender, opening up opportunities for brokers.
The level of non-bank lending demand to fund new SME investment surged to a record high of 55 per cent in the first half of 2025, a 7 per cent year-on-year increase, according to non-bank lender ScotPac.
According to the latest edition of ScotPac’s biannual SME Growth Index Report, the share of SMEs that plan to use bank lenders dropped sharply from 42 per cent to just 30 per cent in the past 12 months. Of these, 21 per cent intend to stick with their main relationship bank and 9 per cent are considering a secondary banking lender.
However, more SMEs are seeking alternative lenders for their SME finance, driven by faster approvals, more flexible lending criteria, and a greater range of tailored funding options.
As well as 55 per cent looking to non-bank lenders for their commercial finance needs, one in four SMEs said they were planning to use some form of private credit to fund an average of 10 per cent of their business investment.
Noting the figures, ScotPac CEO Jon Sutton said the evolving SME finance landscape presented a great opportunity for brokers to guide their clients through a growing and competitive market.
He said: “SMEs have more choice than ever when it comes to finance solutions, and they’re clearly voting with their feet.
“That scenario is creating more opportunities for brokers who are uniquely placed to add value by identifying the right solution for each SME’s needs.”
He noted that confidence remained strong across the SME sector, with 59 per cent of businesses planning to invest for growth over the next six months.
However, the vast majority (94 per cent) said they intended to use their own equity to fund at least part of planned business investment.
Around 5 per cent were unsure about how they would fund investment plans.
Sutton added: “It’s understandable that business owners view their own equity as a safe option, but in many cases working with a lender presents strategic advantages.
“With the right lending solution in place, SMEs can meet tight funding deadlines while preserving their working capital or savings buffers in case unforeseen costs arise.
“For example, ScotPac can help SMEs access finance by unlocking the value in their business assets to take advantage of time-critical opportunities like stock purchases or equipment upgrades.
“We look forward to continuing to grow these relationships in years to come as brokers take a more central role as trusted SME advisers.”
SME lending the new frontier for brokers – SME Bootcamp returns for 2025
According to Deloitte’s Value of Mortgage and Finance Broking 2025 Report, the annual growth in the volume of commercial and asset finance loans written by brokers was more than 20 per cent.
Similarly, small and medium-sized enterprises (SMEs) are increasingly relying on commercial brokers to navigate trade uncertainty, cash flow pressure, and succession planning, according to a new report from National Australia Bank (NAB).
Ahead of his appearance at SME Bootcamp 2025, Trent Carter, partner at Accendo Financial, said the recent lender research showed that brokers play a strategic role in supporting SME clients amid current market uncertainty, supply chain volatility, and rising operational costs.
Carter will join John Sgambelluri, partner at Accendo Financial, for a jam-packed day of insights at the upcoming event held in September. Alongside fireside chats, Carter will deliver a session outlining how brokers and accountants can cycle-proof their business.
The Accendo Financial partner said brokers play a crucial role in supporting SME clients to identify growth opportunities despite these challenges.
As a first step, Carter suggested: “Start by listening closely to your SME clients – they’ll often reveal unmet needs or inefficiencies worth exploring.”
Next, he recommended a review of the client’s financials.
“Dive into their financials to spot margin improvements or underutilised assets,” he said.
“Proactively review clients’ funding structures, looking for opportunities to reduce costs or increase flexibility.
“Look for industries showing resilience or early signs of recovery, and help clients reposition accordingly.”
Tried-and-tested approaches typically fall short in challenging economic conditions, with professionals required to adopt a more tailored strategy to drive meaningful growth for SME clients.
“In a tight market, value is found through insight, not instinct,” Carter said.
How to succeed in any economic cycle
With a global pandemic, fluctuating inflation, and cost-of-living pressures creating economic uncertainty in recent years, small businesses are faced with slowed growth in demand while input costs remain high.
Despite turbulent market conditions, profit margins remain around pre-pandemic averages for the majority of small businesses, demonstrating the potential for resilience in any economic cycle.
For Carter, “curiosity and communication” are the key characteristics of those best equipped to succeed in these conditions.
“The best professionals consistently ask the right questions and turn complex financial data into clear, actionable advice,” he said.
Additionally, maintaining strong relationships with lenders and suppliers is key, according to Carter.
Education is also a critical component of success, the Accendo Financial partner said.
“Most importantly, focus on educating clients – those who understand their numbers make better decisions under pressure,” he said.
“A strong understanding of cash flow, lending options, and market dynamics – combined with a collaborative mindset – means you’re always relevant, whether conditions are booming or tightening.”
To hear Trent Carter, partner at Accendo Financial, speak further on success in every economic cycle, come along to the SME Bootcamp 2025.
Run in partnership with principal partner Maxiron Capital, the event will be held in the following locations:
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11 September at Sofitel Melbourne on Collins in Melbourne
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16 September at Mantra on View, Surfers Paradise on the Gold Coast
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18 September at Le Montage, Lilyfield in Sydney
Click here to register for the free event and don’t miss out.
To learn more about SME Bootcamp, click here.
[Related: Brokers crucial as SMEs face tough decisions: NAB]
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