A new white paper from a big four bank has revealed that a “significant proportion” of small- to medium-sized businesses are looking to grow and expand, which represents an opportunity for brokers.
Part one of NAB’s white paper, Moments that Matter — Understanding Australian SMEs, explores what matters most for Australian SMEs and how they’re approaching business in 2017.
According to the report, which surveyed 808 Australian businesses with a turnover of between $100,000 and $50 million earlier this year, 45 per cent of SMEs are intending to expand their businesses in the next three years – with larger businesses even more likely to do so (62 per cent).
The white paper revealed that medium-sized businesses would also be “much more likely” to be focused on growth, with 39 per cent saying they have hired new staff in the last 12 months (compared to 26 per cent of the total), 31 per cent having invested in growing revenue (compared to 17 per cent of the total) and 27 per cent investing in increasing profitability (compared to 19 per cent).
While most businesses are looking to invest in the company by “winning new customers” (35 per cent), 27 per cent said they were looking to do so by investing in new equipment, machinery or premises.
A similar amount were looking to cost reduction (28 per cent), while 26 per cent were hoping to hire new staff.
However, the survey revealed that Australian SMEs are feeling the pressure of red tape and regulation – with 69 per cent of business owners believing that dealing with red tape takes a lot of effort.
Angela Mentis, chief customer officer of business and private banking at NAB, said it was “not good enough that over two-thirds of Australian SMEs still cite dealing with red tape as taking a lot of effort”, adding that “businesses desperately want to spend more time on their businesses, and less time on dealing with paperwork”.
She added that the bank was therefore providing “simpler contracts and quicker access to credit online” to help SMEs reach their expansion goals, while Steve Kane, general manager for broker distribution at NAB, said that brokers were well-placed to help SMEs fulfil these intentions too.
Speaking to SME Adviser, Mr Kane said: “Brokers, who are often small business owners in their own right, have a shared understanding of the needs of SME customers. They also have access to a broad range of products across the major banks and other lenders. This drives competition across lenders, ensuring that customers are getting the best outcomes.
“Brokers help customers navigate the lenders' criteria which reduces the amount of time and effort needed from the customer. This allows SMEs to spend more of their valuable time running their business.”
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