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Small and medium sized enterprises (SMEs) are disadvantaged when it comes to obtaining finance as banks focus their efforts on larger business loans and writing mortgages.
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SMEs losing out when it comes to finance
29 April 2014
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8 minute read
Firstpoint Mortgages director Troy Phillips, who has nearly 30 years' experience in banking and finance, said lending to SMEs is currently “dead as a doornail”.
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“The banks neglect the SMEs,” Mr Phillips said.
His comments follow the regional banks' attack on the majors in a collective submission to the Murray Inquiry which calls out the Australian banking system’s current bias towards housing lending.
In a separate submission, the federal minister for small business questioned higher rates for small business loans compared with larger business loans and mortgages.
“According to the Reserve Bank of Australia, the average rate on outstanding small business credit is 215 basis points higher than for larger businesses, and 80 basis points above standard home loans rates,” he said
Asked if he believed business lending is being neglected by the banks, the minister told AccountantsDaily’s sister publication Mortgage Business that there are many areas of interest to the small business community when it comes to the lending practices of the banks and access to finance.
“I have put forward a number of these concerns to the Financial System Inquiry for examination,” he said.
“We look forward to receiving the Murray Inquiry’s examination of these areas of interest in the context of the wider financial system”.
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