Finance brokers are replacing the role of the bank manager in their ability to build relationships with small business customers and meet their evolving funding requirements.
That’s according to Scottish Pacific CEO Peter Langham, who says that small business customers are increasingly turning to alternative funders, non-bank lenders and brokers for their finance needs.
Scottish Pacific’s September 2017 SME Growth Index found that the number of SMEs funding growth via their main relationship bank continued to trend down (from 38 per cent to 27 per cent) while the popularity of non-banks had grown (from 10 per cent to 22 per cent since the index started tracking sentiment in 2014).
“One of the main takeaways for me was that there was a steady move from traditional bank lending to non-bank lending, and that is telling me that SMEs are more aware of the alternatives that are out there,” Mr Langham said.
"With an almost 10 per cent jump in the number of growth SMEs citing cash flow as a key barrier to business growth, and the increase in those planning to fund expansion plans via non-bank lending, the time is right for those who can step up and offer fast and effective growth funding for the SME sector.
“I see finance brokers as the old bank manager, where the bank manager understood your business and worked with you to get the outcome you want and the brokers fill that role.”
Scottish Pacific will be hosting a masterclass on debtor finance at The Adviser’s Bootcamp SME Broker events this month.
In the session, brokers will learn the key cash drivers in a business, understand the working capital cycle and review practical applications of debtor finance through real-life case studies.
This event is designed to equip brokers with the skills and knowledge required to begin targeting SME clients and expanding their own businesses.
The event kicks off in Sydney on 14 November, before heading to Melbourne on 15 November, Brisbane on the 23rd and Perth on the 28th. It will be hosted by James Mitchell, managing editor of mortgages at Momentum Media.
“Over the last 12 months, there has been a significant shift among mortgage brokers towards small business finance,” Mr Mitchell said.
“This was evident in The Adviser’s Elite Business Writers ranking for 2017, which showed a big increase in volumes other than residential mortgages among the top 25 brokers in the country.
“Any broker in Sydney, Melbourne, Brisbane or Perth looking to add another string to their bow and crack into the fast-growing small business market will gain incredible insight at the [Bootcamp] SME Broker event this year.”
For more information about The Adviser’s Bootcamp SME Broker 2017, supported by our principal partner NAB, visit https://www.bootcampsmebroker.com.au.
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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