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Half a million Aussie SMBs are unaware of alternative finance sources

Research by invoice financier Apricity Finance has found that over half – or 51 per cent – of small-to-medium enterprise (SME) owners are willing or have used secured finance when borrowing money.

  • while the Big Four banks remained the most common source of funding, more than one in five (22% – or nearly half a million businesses) were not aware of any alternative finance sources outside other traditional lenders such as smaller banks, credit unions, and building societies
  • less than four in 10 (38%) say they are confident they could secure additional funding for immediate needs; while as many as 15% say they are not at all confident.

The national survey canvassed a representative sample of 503 business owners with fewer than 50 employees.

The findings found more than one in five (22%), the equivalent of more than half a million small business owners, are not aware of any alternative sources of financing.

Commenting on the survey findings, Apricity Finance CEO Linden Toll said: “The ability to access a secure stream of funding to support the current vital stage in business resurgence is key to achieving a stable recovery.

“We were interested to see that awareness of alternative finance is higher among experienced businesses, suggesting a knowledge gap among newer players who may be missing out on opportunities. Ensuring small business is made aware of the options could be a game changer, especially for those who continue to struggle with funding for growth,” said Mr Toll.

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“We asked about SME’s experiences to gain a clear picture of the growth and funding outlook for this vital sector, which we see as a gauge of overall economic trends,” said Mr Toll.

“The ability to access a secure stream of funding to support the current vital stage in business resurgence is key to achieving a stable recovery,” Mr Toll said.

Mr Toll’s views are consistent with other insights from the research, which asked SMEs to identify their top two preferred government measures as part of a “Budget wishlist”.

The top-ranking answers were greater stimulus across the whole economy as distinct from sector-specific initiatives (48%), and more tax relief (46%).

“The boost in stimulus for the infrastructure sector, and the extension of the asset write off is good news for many SMEs,” said Mr Toll.

“There was a lot of initial excitement about the infrastructure stimulus in last year’s Budget, but the very high surety bonds and bank guarantees required to participate in most projects formed an instant barrier to entry. This issue needs to be addressed if the SME sector is going to benefit from these new infrastructure projects.”

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