ANZ's $1 billion backing for startup businesses
Businesses are today applauding news of the ANZ's decision to pledge $1 billion to assist startups with funding for their business banking.
ANZ is taking the opportunity to dispel the stigma that they do not lend to startup businesses and while the move is being marked as a good omen for small businesses, there is concern as to whether businesses will embrace the offer, reports the Sydney Morning Herald.
"It's an important part of the small business sector that we already support and we decided to show our commitment to this sector by increasing lending to this market," said ANZ general manager of small business banking, Nick Reade. We're hoping to grow our business and help new businesses on the way," he said.
However, business loans for under $100,000 fell to $2.6 billion in December compared to $3 billion the year before and according to data from East & Partners small businesses are saving more than they are borrowing.
Despite this, executive director of the Council of Small Businesses Australia, Peter Strong, says investing the money into small businesses is good for Australia's economic future and believes that IT-based startups would benefit the most from the funding.
"It's great news because this is a lot of money in recognition of the importance of small business," said Strong.
The other concern amongst business owners is to the structure ANZ will provide to the assistance. Although startups require funding to get off the ground, repayments and interest rates are a major concern for small businesses that can often begin with only small growth.
"Innovation in repayment plans or deferred repayments would obviously assist and make more small businesses consider bank loans rather than [access funds from] friends and family. It will be interesting to see how ANZ intends to structure lending for small business owners," says founder of AgendaSelects, Blake Hutchison.
It is now hoped that other banks will soon follow ANZ's lead. Those looking to find the best options for their business finance can compare business banking here.
Have a question about business bank accounts? Ask the gurus at Mozo Answers.