A recent survey revealed three quarters of Australia’s SMEs made a decision to access business finance – whether as a means to invest in their growth, to fund day to day operations, or to refinance or manage existing debt.
In a crowded market, though, choosing among many different business lenders can present a challenge. These 4 things are worth thinking about:
Avoid the ‘one-size-fits-all’ approach. Business requirements vary. Some might need secured business loans for large investments; others want something more flexible. Perhaps the answer is a ‘line of credit’ product for at-need availability, or specific solutions like equipment or vehicle finance.
Banks are not the only options. Many businesses choose non-bank lenders, and benefit from advantages such as flexible arrangements, prompt, efficient customer service and advice, and more personalised financial products. They see added value in lenders who get to know clients and their business needs – present and future.
In fact, almost half of SMEs rate the existing relationship they have with their lenders as more important than the cost of the loan.
The interest rate might be top of the agenda, but it doesn’t tell the whole story. Obviously it’s smart to find a competitive rate but there are other questions to ask:
Businesses should research lenders, as they would any other provider. Reputable lenders are committed to transparency, and forthcoming about:
Will the business lender who ticks the boxes on all the points above also smooth the track to fast, flexible and fuss-free finance?
Lack of finance, or delayed access to funds, represents lost opportunity.
An often overlooked but real ‘cost’ of external finance is the time spent in securing it. The search alone is time consuming. It pays to investigate the processes potential lenders have in place.
Every hour of waiting is a loss of valuable business time, and a hidden cost of a business loan.
“As businesses navigate what can be a complex lending landscape, each of these considerations raises additional questions. It isn’t surprising that almost 50% of SMEs need help, and have widened the search for the right answers”.
GetCapital is Australia’s leading non-bank SME lender, and knows how important it is that Australian SMEs choose the right product and the right lender to match their business requirements. Talk to one of our dedicated Relationship Managers about a range of innovative finance solutions.