ABA CEO Anna Bligh has urged small-business owners to seek credit, amid new research reporting loan approval rates of 94 per cent.
The Australian Banking Association (ABA) has urged South Australian businesses “not to hold back” in seeking finance, with new internal research reporting loan approval rates of 94 per cent among member banks.
According to the ABA’s Economic Report 2019, 60 per cent of small businesses believe that access to finance is hindering their development, with women (65 per cent) and young business operators (67 per cent) most affected by such constraints.
ABA CEO Anna Bligh and Business SA CEO Martin Haese recently hosted a roundtable of local businesses to discuss the research, the new Banking Code of Practice, and to provide a briefing on a new online resource available to SMEs.
Ms Bligh said the visit to South Australia was important to highlight that banks were “ready and open to lend” to businesses.
“With historically low interest rates, high approval rates and increased protections under the new Banking Code of Practice, there’s never been a better time to contact your bank about finance for your small business,” Ms Bligh said.
“Our own data tells us that while approvals remain high for small-business finance at 94 per cent, the number of applications has dropped off by a third over the last five years.
“There are many possible reasons for a drop-off, including some businesses perceiving the process as too complex, too time consuming and unlikely to result in approval.”
Mr Haese added that businesses, and particularly those in regional areas, often raised concern about access to finance and how complex the process was.
“Every business seeking help when considering applying for finance would benefit from the additional information, checklists or advice on overcoming the hurdles they find when applying for loans,” Mr Haese said.
“It can be very difficult for any SME to access finance when they’re juggling day-to-day operations and managing staff. Ensuring the process is easier, at a time when interest rates are low, could help more businesses take that leap to grow their products or services, boosting our economy at the same time.”
[Related: Feedback sought for SME funding guide]