(11 June 2009 – Australia) In today’s lending market, banks are in an extraordinary position of power over businesses looking to secure cash in a tough environment. The key for banks is to understand how to lend sustainably, and what perception is being developed by the small business market of their banks.East & Partners’ April 2009 report into SME banking found that nearly 70
percent of businesses have experienced a rate increase on loans in the last six
months, despite being in a falling interest rate environment.
Banks are clearly repricing upwards, and the increased cost to SMEs can be
attributed to increased margins as well as costs associated with added
securitises and covenants.
The real question for any bank wanting to compete, long term, in the Australian
SME market is; “Are current bank actions sustainable for long term
relationships?”
If small businesses do not perceive that their bank is looking after their
interests, when good times return and credit is more readily available, there is
a much greater chance of businesses moving on to what they perceive will be a
better relationship.
East & Partners is creating a research report into the changing face of bank
reputation and how reputation can be changed for the better in the long term.
East asks that interested parties register their interest for this important
ongoing study into SME market dynamics.
For further information or to express your interest, email Robert Morgan at
robert.m@eastandpartners.com