Significant Appetite for SME Funding Despite Barriers - Judo Bank
(14 September 2021 – Australia) While there is significant appetite among SMEs for funding, with one in two small businesses applying for credit in the past six months, up to a quarter were rejected for new borrowings according to new East & Partners research commissioned by Judo Bank.
Of those that were successful, they had to wait 43 days on average. One out of every three rejected borrowers had plans to add another three FTEs according to the research. The broader recovery in the Australian economy was found to be hampered by cumbersome risk-averse lenders whose actions are widening the gulf between the haves and the have-nots according to Judo Bank as the group gears up for an initial public offering (IPO) in Q4 2021.
“The SME sector is showing remarkable resilience in the face of lockdowns, but the reluctance of some lenders to think outside the square and back businesses is hard to stomach. SMEs are still finding it difficult to get access to credit. It’s something banks need to have a good look in the mirror about. The irony is that it’s never been a better time to buy another business” commented Judo Bank CEO, Joseph Healy
“We don’t have ambitions to be the biggest business lender in the market. We aim to be the best. We see a big market, a hugely dissatisfied SME community. We are just going to focus on what we do really well” Mr Healy added.
“Despite the vast amount of Government stimulus and support offered to the banks, this report finds that over one in four SMEs are being knocked back from accessing new funding. This has direct implications for business investment and employment, with the report revealing that over one in four of those SMEs refused a loan were in effect, stopped from employing on average three additional staff members” stated Judo Bank CRO, Angelo Manos.
“And adding insult to injury, the report shows that banks are taking on average 42 days to discharge loans when an SME switches lender. These unnecessary loan transfer delays by the banks inhibit fast access to funding at a time when SMEs need it most” Mr Manos added.