Contrary to popular perception, SMEs are having very little problem accessing finance to fund growth or cover cash flow concerns, according to a business advisory firm.
According to advisory firm HLB Mann Judd, access to finance is the lowest concern facing Australian SMEs in 2018.
“[Our] findings are consistent with data released by the Australian Bureau of Statistics which indicates that 9 in 10 SMEs who sought finance were able to obtain it,” the firm said in its "SME Research Report 2017/18".
“We’ve got a good relationship with the bank – funding is not a concern,” the report quoted one business owner.
“Access to funding is fine – we just secured a new business loan with [our bank],” said another.
In years gone by, access to finance was claimed as a major barrier to SME growth. However, an explosion in the number and variety of funding providers appears to alleviate those concerns.
My Business has heard from businesses using export finance to expand their sales into overseas markets, while crowdfunding has become the latest opportunity for innovative businesses to access capital.
At the same time, the major banks appear to have found a bigger appetite for lending to smaller businesses.
The international Organisation for Economic Co-operation and Development (OECD) recently claimed that Australian businesses, while still heavily reliant on bank loans for funding, are gradually seeking out alternative finance providers as a means of funding expansion and overcoming cash-flow constraints.
The HLB Mann Judd report found that cash flow remains the primary reason businesses seek out short-term finance, accounting for 37 per cent of claims. This was followed by the need to replace existing machinery or equipment (28 per cent).
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.