SMEs ‘too casual’ about finance applications

SMEs ‘too casual’ about finance applications

The head of a national fleet management company has said that while small business operators are becoming increasingly savvy about managing their company vehicles, many are insufficiently prepared when it comes to financing asset purchases.

The head of a national fleet management company has said that while small business operators are becoming increasingly savvy about managing their company vehicles, many are insufficiently prepared when it comes to financing asset purchases.

Nigel Malcolm, who founded and has operated Fleetcare for 27 years, told My Business that it is an interesting dichotomy that small business operators are seeking fleet management expertise armed with plenty of questions and product knowledge, but without the required business documentation needed to secure finance.

“The bit that they so often forget about is they need to be prepared for these things. And they do approach finance a little bit too casually,” he said.

Mr Malcolm said that business operators would save a great deal of time and stress, and potentially money, by having their financial and business documentation ready from the outset of seeking out finance for the purchase of a new asset.

“That is what we're looking for, that is what the banks are looking for, and so many of them are ill-prepared – they haven't got financials, they haven't got their current business plan,” he said.

“It doesn't need to be big – just a couple of paragraphs: what happened in the last two years, how are the financials looking, what's the plan. And, of course, the newer the business, the more information they need to put into it.

“Had they done a bit more work on that so that they are telling their story and it's in writing and it's ready to go, will make life so much easier for them.”

However, Mr Malcolm praised SME operators for being particularly savvy about investigating the best options available to them for financing, managing and operating new business vehicles.

“We're finding they are asking more questions than what they used to, whereas before, maybe five years ago, it was more about 'I just need a fuel card' and they were looking at it simplistically. Whereas nowadays, they are asking more questions and there's a real maturity in the SME space in Australia, which is just really great to see.”

He added: “A lot of them are really placing themselves in that [scenario of], 'if I'm a big company, how would I be doing things?'”

SMEs ‘too casual’ about finance applications
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