Small businesses losing faith in major banks

Polly Fleeting

04 Oct 2019

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Major banks have historically played a bigger role in supporting small businesses, but for the first time Aussie business owners are turning away in search of something different. 

This is according to the latest SME Growth Index by East & Partners on behalf of Scottish Pacific, which revealed that a low 18% of small businesses would opt to borrow from a major bank to fund their growth compared to 38% back in 2014. 

While small business loan approvals from banks are at 94%, according to the Australian Banking Association the amount of small business loan applications to banks has plunged by one third over the last 5 years. 

Over that time a bunch of alternative lenders have come into the SME sector, many of them offering more efficient application processes, credit decisions that reflect the strength of a business (rather than relying on mortgage underwriting), great customer service and above all competitive lending products.   

But Scottish Pacific CEO Peter Langham says that while it’s great that business owners are aware of the options out there, they still haven’t fully grasped the advantages of the alternatives available to them, as 83% still end up using their own hard earned cash instead of taking out a business loan. 

 “Some business owners remain unaware of funding alternatives. There’s a much larger group of SME owners who are aware of non-bank funding but don’t fully understand how it works,” he said.  

“They are too busy to research it, so put this in the “too hard” basket. When they can’t secure bank funding, they just tip their own money in to fund growth.” 

So if you’re unsure about where to turn for a business loan, say hello to a few lenders that could be your perfect fit and help you kick your 2019 business goals before the year draws to a close.

Business Loans 2019

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Scottish Pacific Invoice Finance
  • Interest rates from 1.25% per fortnight

  • Borrow up to $1,000,000

  • 24 hour approval

If you need a helping hand to improve your cash flow and want a business loan that works a little differently, Scottish Pacific invoice finance may be exactly what you need. With this type of line of credit, businesses can receive up to 95% of their invoice value within a swift 24 hours from approval. Interest rates start at 1.25% per fortnight and there are no ongoing fees with Scottish Pacific, but just remember there is a one-off $500 fee when you first get approved. 

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Capify Unsecured Small Business Loan
  • Extra repayments and redraw facility

  • Borrow between $5,000 and $300,000

  • Same-day approval

Only looking for a short-term business loan? With the Capify Unsecured Business Loan you can take out a loan between 3 and 12 months, and borrow up to $300,000 for your small business. The application process will take just 5-10 minutes, and you could get approval the same day you apply. And if you need a little flexibility, borrowers can make extra repayments and redraw their extra funds if they need to later on.

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Lumi Unsecured Business Loan
  • No fees

  • Borrow between $5,000 and $200,00

  • Approval within 2 hours

If you’re on the hunt for a loan to help boost your business, the Lumi Unsecured Business Loan could be exactly what you need. Lumi may help fund your goals, big or small, as you can borrow between $5,000 and $200,000. There are no pesky fees on this loan, but just bear in mind that interest rates start at 16% and the maximum loan term is 18 months. It’s quick and easy to apply for the Lumi Unsecured Business Loan and you’ll receive a response in 2 hours if you’re approved.

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GetCapital Flexible Business Loan
  • Rates from 0.87% per month

  • Borrow up to $500,000

  • Extra repayments and redraw facility

Looking for a flexible loan for your small business? Well, it’s all in the name with the GetCapital Flexible Business Loan, and in its features too! With this loan businesses can borrow anywhere between $10,000 and $500,000, receive interest rates starting at 0.87% per month and choose from a range of borrowing terms, between 6 and 12 years. Another attractive feature is that GetCapital allows borrowers to make extra repayments if they wish to as well as redraw those funds later if they find themselves in need of a little extra cash.

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Moula Business Loan
  • Borrow between $5,000 to $500,000

  • No upfront or ongoing fees

  • Approval within 24 hours

The Moula Business Loan could be the ticket to help you end the year on a high for your small business. With no upfront or ongoing fees, the ability to borrow between $5,000 and $500,000 and approval within 24 hours, there’s definitely more reasons that one to consider this loan. But wait, there’s even more! Interest rates start at 0.61% per month, plus borrowers are able to make extra repayments so they have the flexibility to pay back their loan at their own pace and kick debt quicker.

Want to check out more business loans? Head over to our business loans comparison table or have a read of our helpful business banking guides.

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