SMEs trading banks for fintechs, poll suggests
Fintech and other non-bank lenders are set to overtake banks as the preferred source of growth funds for Australian SMEs, the latest Scottish Pacific SME Growth Index suggest.
The twice-yearly poll was informed by interviews with more than 1250 SMEs with annual revenues of up to $5 million. Scottish Pacific found that between 2014 and 2018, the proportion of SMEs intending to use banks for funding dropped from 38% to 24%. Meanwhile, 22% of SMEs identified non-bank lenders as their preferred source of growth funds, up from 11% in 2014. In addition, it was revealed that amongst SMEs that have not used non-banking lending options in the past 12 months, 47.6% would be interested in using these options in the future.
Commenting on the findings, Peter Langham, CEO of Scottish Pacific said: “Alternative lending options, including debtor finance and P2P lending, offer SMEs the chance to fund growth without using property as security. Business owners need to know they have a credible choice when they are looking for funding.”
Fintech Australia Chair, Stuart Stoyan welcomed the latest SME Growth Index, explaining that it provides yet more evidence of the “extremely important role” fintech lenders are playing to help Australia’s 2.1 million SMEs grow.
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