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SMEs looking to partner with multiple lenders: ScotPac 

by Josh Needs11 minute read

SMEs need to “maintain a strong relationship with their broker” as they look to explore the lending market, according to the lender.

Non-bank lender ScotPac’s recent SME Growth Index has found that four in five SMEs now partner with more than one lender to meet their working capital needs.

The lender said the increase in businesses looking to use a secondary lender meant a greater focus on specialised services, such as invoice finance, asset finance, and trade and supply chain finance, beyond traditional bank relationships.

ScotPac stated that the findings regarding multiple lending partners came as 61 per cent of SMEs expressed that they plan to invest in their business in the next six months, a 15 per cent jump year on year and the highest level of investment intent recorded since 2019.


ScotPac chief executive Jon Sutton commented that the increased level of investment intent along with a renewed confidence in SME owners to explore the lending market meant businesses needed to “maintain a strong relationship with their broker”.

He stated: “Despite the macro-economic headwinds of rising wages, stubbornly high inflation, and uncertainty about interest rates, Australian SMEs are continuing to invest in their businesses at near record levels.

“While some of that growth can be attributed to higher input prices, the strength of SME investment intent goes beyond this factor alone.

“An emerging driver is choice. Non-bank lending has doubled in the past 19 months as SME owners and brokers have become increasingly aware of the opportunity to find fast, flexible, and tailored working capital solutions.”

ScotPac’s findings followed fellow non-bank lender Banjo Loans revealing that its inaugural Banjo Barometer saw a surge of 40 per cent in loan applications from SMEs during the first quarter of the 2024 financial year.

The lender found that while some of the increase was due to cash flow challenges, many applications were driven by “the need to invest in new equipment and technology to drive improved outcomes”.

Banjo Loans CEO Guy Callaghan noted: “SMEs are still seeing opportunities in the current marketplace and it is part of our DNA to help businesses to grow where they can.

“The Barometer uses loan data to drill down into what business sectors are growing or struggling so we can understand the challenges and growth prospects facing SMEs in today’s economic climate.”

The findings followed Mr Sutton’s encouragement, earlier this month, for SME owners to reach out to their brokers about possible working capital solutions as they look to both develop moving forward, but also encounter and deal with the economic hurdles businesses face.

[Related: What’s worrying your SME clients?]

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