Online-only loans gain popularity
A growing number of Australian small and medium enterprises (SMEs) are planning to borrow in the next six months, with nearly half showing a preference for online-only loan applications, according to the latest ScotPac SME Growth Index.
The bi-annual report, which is the country’s longest-running survey on SME sentiment and revenue growth prospects, found that just 6% of SMEs have ruled out taking on new credit in the near term. Among SMEs identified as being in a growth phase, nearly all or 97% anticipated a need for short-term business loans.
Online-only applications emerged as the top choice for 48% of businesses, while 19% said they preferred a hybrid approach, allowing them to switch between online applications and customer service support.
Only 10% of SMEs indicated they favoured working exclusively with a relationship manager, though those in a growth phase were three times more likely to choose this option compared to businesses in a neutral or declining phase.
SMEs are stepping up their need for funding—94% are seeking new finance!
— ScotPac Business Finance (@ScotPacBF) November 19, 2024
In our latest SME Growth Index report we highlight the surge in demand for fast, flexible online loans with growth-focused businesses leading the charge
Read more: https://t.co/gyPdIPTpp0#SMEGI #SMEs
ScotPac chief executive Jon Sutton (pictured above) attributed the strong demand for flexible credit solutions to a mix of economic, technological, and regulatory factors.
“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.”
Despite the rise in popularity of online-only applications, Sutton emphasised the ongoing importance of expert advice for SMEs navigating increasingly complex financial decisions. He also noted that brokers who stay informed about emerging financial products are well-positioned to help SMEs capitalise on appropriate lending solutions.
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