Banks issue over 300,000 new loans to SMEs

According to the ABA, banks lent approximately $588 billion over 302,945 new loans to SMEs in the FY23, up from $461 billion in FY22.

The figures, from the ABA’s Banking By Numbers report, found that there was spike in SME lending in June 2023, which was attributed to SMEs looking to take advantage of the government’s elevated instant asset write-off before it expired.

ABA chief executive Anna Bligh said: “This research shows banks are fuelling credit to the lifeblood of Australia’s economy, our SMEs.”

The ABA said the report also found SMEs continue to face a difficult economic environment, with rising interest rates and increasing energy costs the primary concerns small businesses face.

The CEO of the Council of Small Business Organisations Australia (COSBOA), Luke Achterstraat, said: “We know that access to capital is critical for small businesses, particularly with a perfect storm of costs across the board.

“While there is more work to be done, these latest figures indicate a significant uplift in SME lending which is a positive sign.”

ABA bank members are also set to support borrowers requiring financial counselling, with Ms Bligh noting that “banks also understand many customers are doing it tough battling a quick succession of interest rate rises, inflation and associated cost of living challenges”.

She flagged that the association had launched a new financial assistance hub to help small-business owners understand how banks could help them during times of financial difficulty.

“Originally launched to assist businesses during the COVID-19 pandemic, the hub has been updated and completely revised to ensure it is useful, easy to comprehend and relevant to those in need,” Ms Bligh said.

“Financial counsellors get people back on track when they are experiencing the most difficult moments in their lives. Banks stand ready to support the government’s voluntary financial counselling scheme, committing $6.15 million in the first year, starting January 2024.”

ASIC to further protect SMEs

The increase in SME lending by banks was revealed on the same day as the Australian Securities and Investments Commission (ASIC) confirmed it would commit to further enforcement action to protect Australian consumers and small businesses.

Releasing the commission’s corporate plan, ASIC chair Joe Longo said it would build on the action taken across 2022–23.

Mr Longo said: “ASIC has made strong progress since we released our strategic priorities last year, and we still have more work to do.

“We are responding to key trends and emerging issues in the regulatory landscape, where there are major shifts across sustainable finance, the digital and data economy, and an ageing population.

“We are also closely monitoring the development and use of artificial intelligence and what this means for the businesses and markets we regulate and exploring potential uses of this and other technologies within ASIC.”

The commission said the commitment to enforcement and protection for small businesses was important in an environment where “scams, digitally-enabled misconduct and predatory lending practices are increasingly prevalent”.

To find out how you can take advantage of the demand for SME loans by diversifying your brokerage into SME lending, register now for the free SME Broker Bootcamp 2023.

Speakers will unpack how brokers can help business owners access capital by building a sustainable business model so they can service all of their SME clients’ needs.

The 2023 SME Broker Bootcamp will take place in the following locations:

• Wednesday, 6 September: Rydges South Bank, Brisbane
• Tuesday, 12 September: Montage, Sydney
• Thursday, 14 September: Zinc, Melbourne

For more information about the conference, including agenda and speakers, click here.

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