As lockdowns lift, SMEs are likely to have a need for business finance to invest in new stock, creating an opportunity for brokers
- 80% of SMEs that have sought a business loan in the past have been successful with the application.
- Two out of five (36%) SMEs that have successfully secured business finance have used the funds to purchase stock or goods
- Up to 50% of SMEs plan to apply for business finance in the next 12 months, highlighting valuable opportunities for brokers
Sydney (date): Research by leading online SME lender OnDeck Australia, confirms that as lockdowns are lifted around the country, many SMEs will require business finance in order to re-stock. Brokers can play a key role, supporting timely access to loan funds.
OnDeck’s research found that of the 80% of SMEs that have successfully secured business finance in the past, almost two out of five (36%) have used the loan to invest in new stock.
The same research highlights strong demand for SME finance. One in three (32%) SMEs with annual turnover between $500,000 and $5 million plan to apply for a business loan in the next 12 months. This figure rises to 50% of SMEs with annual turnover between $2 million and $5 million.
Mr Robbie Fidler, National Broker Channel Manager, OnDeck Australia, said, “The COVID-19 lockdowns have had a significant impact on the inventories of many small businesses. Retailers in particular have missed out on almost the entire autumn trading season, and now is the time many need to invest in spring inventory.”
“In the current environment, the small business sector may still be experiencing disruptions in supply chains. Adding to the challenge, businesses that have been in hibernation for several months may not have the cashflow to support upfront purchases.
“This highlights the important role that business finance can play – and the opportunity for brokers to support their SME clients. The sooner a business can rebuild stock levels, the faster it can see a return to more normal revenue flows,” added Mr Fidler.
Along with stock purchases, brokers have an opportunity to remind SME clients that small businesses can also take the opportunity to invest in new capital equipment following the Federal Government’s decision to extend the $150,000 Instant Asset Write-Off to 31 December 2020.
Traditional sources of business finance may not be timely enough for SMEs to achieve a rapid restock. OnDeck’s study found that one in four (24%) SMEs have been rejected by a bank when seeking a business loan, rising to 38% of businesses that have been in operation less than five years.
Among those that have been successful in securing finance, 27% say they have been negatively impacted by the time taken to arrange the loan – the most common problem (43%) being delays in the delivery of products or services.
As a dedicated SME lender, OnDeck Australia has a streamlined loan application and approval process, often with funds available in one business day.
“As trading activity resumes, SME owners need to focus on taking advantage of every opportunity to rebuild their business – not spending hours applying for finance. The support of a broker can be invaluable to SMEs at this time, especially when coupled with
OnDeck’s fast online application process, which is designed to support a timely outcome for SMEs. It can help businesses restock sooner and take advantage of any trade discounts to maximise profit margins, while delivering increased revenue to the SME’s broker.” concluded Mr Fidler.
OnDeck (NYSE: ONDK) is the proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online. Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck has provided over $13 billion in loans to over 110,000 customers in 700 different industries across the United States, Canada and Australia. In Australia, OnDeck is backed by leading accounting software provider MYOB and has a 5-star rating from Trust Pilot. For more information, visit www.ondeck.com.au
About the research
The independent research was conducted online in April 2020 by Honeycomb Strategy across more than 300 SME owners Australia-wide. The survey included SMEs with less than 50 employees, annual turnover of $50,000-$5 million, and in operation for at least 12 months.
About OnDeck’s COVID-19 Resource Hub
OnDeck’s COVID-19 Resource Hub provides SMEs with details about government stimulus packages, practical tips on managing a small business through uncertain times, case studies of inventive SMEs pivoting their expertise to survive the pandemic and recommended reading from trusted sources. To find out more visit www.ondeck.com.au/covid-19/
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