The Australian Small Business and Family Enterprise Ombudsman estimates the nation’s 2.3 million small businesses (with less than 20 employees) represent about 98% of all businesses in Australia. That’s a massive customer base and one that is eager for new funding options.

One business lender’s September 2021 SME Growth Index shows that two in every three SMEs (66.1%) sourced new funding options during the past year. Of those surveyed, 38% applied for asset and equipment finance, 16.3% sourced new invoice finance, 15.9% sought a new secured bank loan, and 8.8% borrowed from an online fintech.

The reasons for the new funds varied. The majority of businesses (57.5%) allocated the finance to capital expenditure to purchase plant and equipment, while 40.6% used it to improve cash flow. A third (34.3%) paid down debt, 29.3% used the funds to secure large projects or clients, 20.2% wanted to expand capacity, 16.6% refinanced existing loans, 15.1% wanted to hire staff or upskill existing staff, and 7.1% used the funds to enter new markets or create new products.

The top five sectors securing finance through another business lender are construction, accommodation and food services, retail trade, professional services and manufacturing, and this hasn’t changed in the last two years.

Business Lenders concur that almost 40% of small businesses require access to an average of $47,000 in finance.

They find that many businesses require funds to cover assets, purchase additional inventory, or fund further digital transformations after lockdown. We’re also seeing business owners looking for fixed rates for short-term loans before interest rates start to climb.

For small Business owners, access to capital is considered vital, with 87% of small business respondents reporting that they would miss opportunities without it.The pandemic has highlighted the importance of SMEs having solid cash flow to help deal with unforeseen events.

Managing cash flow is one of SMEs’ top challenges, and it’s common that gaps may need to be filled to cover temporary shortfalls or investments to support growth.Lockdowns and restrictions have made it hard for SMEs to report accurately on their performance, resulting in lenders declining finance or making the submission process lengthy and frustrating.

Some alternate business Lenders products help remove this barrier by only requiring a self-certified income declaration and one other form of documentation (accountant’s letter, last two BAS, or six months’ bank statements) to support current income.

Market research shows that one in four small businesses are rejected for finance by a mainstream bank, and as many as 25% of those approved for loans report delays in the lending process that have negatively affected their businesses.

With access to over 120 banks and finance Lenders, and thousands of finance products, EZ Finance is your “Go-To” place for appropriate financing and quick solutions for all your finance needs.