New research by Momentum Intelligence reveals that while small businesses think of the major banks as a source of finance, they feel that their loyalty to these banks is not being rewarded accordingly.
This was the sentiment shared by 66 per cent of small businesses and is in line with research by small business lender OnDeck Australia which found that 25 per cent of financing applications filed by small businesses were rejected by a mainstream bank. This figure rises to 38 per cent for small businesses that have been in operation for less than five years.
Moreover, among small businesses that have applied for bank finance in the past, 25 per cent stated that they have been negatively impacted by the time taken to secure finance, with 43 per cent having faced delays in the delivery of products, 37 per cent having experienced a slowdown or halt of normal business operations, and 11 per cent having faced delays in engaging new staff.
“The major banks do a great job of promoting their brand,” Cameron Poolman, CEO of OnDeck Australia, said. “What they are not so good at is meeting the needs of Australia’s small-business community.
“We know that time is of the essence for small business owners,” Poolman added. “Time spent on paperwork-heavy applications is time away from the business, and a protracted approval process can mean lost opportunities for small enterprises.”
