Credit demand surges with 94% of SMEs seeking new capital: ScotPac
Just 6% of Australian SMEs have ruled out new borrowings in the next six months, while the preference for online-only loans among SMEs nears 50%.
Credit demand was even stronger for the 40% of SMEs described by their owners or managers as being in a growth phase, with a near-unanimous 97% of this category foreseeing a need for short-term business lending.
These headline findings are contained in the latest edition of ScotPac’s bi-annual SME Growth Index Report, Australia’s longest-running SME sentiment check on revenue growth prospects.
In a related finding, the speed and comparative ease of online-only applications emerged as a clear winner when it comes to how SMEs prefer to commence new finance inquiries:
- 48% of all SMEs expressed a preference for online-only loan applications.
- 19% of SMEs said they wanted to work with a lender that offered the flexibility to switch between online-only applications and a dedicated customer service resource.
- 10% of SMEs prefer to work solely through a relationship manager, with SMEs in a business growth phase three times more likely to favour this option than those in a neutral or declining growth phase.
ScotPac CEO Jon Sutton (pictured), said a combination of economic, technological, and regulatory factors have combined to create an environment where the demand for flexible credit by Australian SMEs has exploded to new levels.
“The post-COVID economic recovery has seen tens of thousands of SMEs seek credit to re-establish their supply chains and boost their purchasing power,” Sutton said.
“At the same time, regulatory changes have paved the way for an expansion of non-bank lending, and new technology has made lending solutions easier to navigate and more accessible to more businesses.” Sutton said that while the popularity of online-only applications was understandable, the need for expert advice and support is greater than ever.
“We understand that time is greatest asset for any SME owner or operator,” Sutton said. “That is why ScotPac offers fast and flexible products like our Boost Business Loan, which has an online-only application process for quick cash injections, and a dedicated team of relationship managers who can provide expert advice and support on more complex matters.”
Sutton said the growth in SME demand for finance means brokers who have kept pace with new products will be well-placed to educate SMEs and help them take advantage of appropriate lending solutions.
ScotPac’s Partner Portal includes features like our product selector tool, working capital calculators and accelerated quotes to make life even easier for brokers.
