Solving the SME funding formula

As the financial year draws to a close, the pressure intensifies for small and medium-sized enterprises (SMEs) across Australia. This pivotal period, traditionally marked by end-of-year sales drives and meticulous tax planning, is being made all the more challenging now, amid increasing economic headwinds, lower confidence, and a tightened lending environment.

For astute finance brokers, though, this confluence of factors presents a significant opportunity to step up as indispensable partners for their SME clients, ensuring their resilience and future prosperity.

In this edition of The Adviser, we’re delving deep into the SME finance landscape offering the latest insights and expert analysis you need to navigate this critical time.

Our cover feature, The funding formula (page 18), lays bare the challenges confronting Australian SMEs. As economic pressures mount and global uncertainties persist, many small businesses are finding it increasingly difficult to stay afloat. However, with potential tax changes on the horizon and traditional lending criteria becoming more stringent, brokers are uniquely positioned to introduce a new funding formula – one that empowers SMEs not just to survive but to thrive in the year ahead.

The ongoing instant asset write-off roulette has undoubtedly created uncertainty in the asset finance market. As explored on page 34, SMEs are grappling with the fluctuating future of this key incentive, making essential asset acquisitions a complex decision. In this environment, brokers play a crucial role in providing clarity, guiding businesses through the uncertainty, and facilitating access to the right asset finance solutions to drive their operations forward.

Don’t miss our in-depth commercial mortgages feature, sponsored by Thinktank, on page 22. With an estimated 60–65 per cent of commercial loans still being written outside of the broker channel, the opportunity for diversification and growth in this sector is immense.

Furthermore, with rising costs, tight margins, and increasing tax obligations squeezing SME cash flow, the demand for effective cash flow finance solutions is surging. In ‘A capital idea’ on page 28, Ben Squires explores precisely how brokers can assist businesses in finding the fast and flexible funding they need to manage their working capital and seize growth opportunities. Understanding these solutions is paramount as we approach the end of the financial year and businesses look ahead.

We also bring you invaluable insights from leading finance brokers. On page 12, our Elite Broker profile showcases commercial broker Gus Gilkeson from Grow Capital, while those new to writing SME finance should also check out the top tips from seasoned finance brokers on page 4.

I hope you enjoy this edition of The Adviser and do reach out if there’s anything you’d like to see included in future editions: [email protected]