30 August 2019
If you’ve ever dreamed of throwing in the towel at work and starting your own business, you’re not alone. In fact, more than nine million Australian’s dream of being their own boss.
Research commissioned by the Australian Banking Association, found that while millions of people have dreamed of working for themselves and starting a business, 60 per cent (5.4 million) say ‘access to money’ is the sticking point. (ABA Economic Report 2019)
The numbers are even higher for women and young people, 65 percent of women and 67 percent of people aged between 18 and 34 believe access to finance is stopping them from fulfilling their entrepreneurial dreams. (ABA Economic report 2019)
When it comes to what sort of small business, IT/technology tops the list for men, while women prefer something in the retail/clothing area, food and hospitality was the second most popular choice for both men and women.
ABA CEO, Anna Bligh said there is no better time to contact your bank about a small business loan, interest rates are at record lows, banks approval of small business loans is at 94 percent, and the new Banking Code provides for fairer and simpler small business contracts.
“Despite this, small business loan applications have declined by a third (33 percent) since the 2014 calendar year. Encouragingly, there has been a lift in the June quarter. It’s early days, but we hope that it will continue.
“There could be many reasons for the downturn, including believing that they won’t get a loan, thinking it takes too long, deeming the application process too complex or they’re simply borrowing money from other sources.
“Banks understand that small business operators are in the business of running their business, not being bankers, so, in conjunction with COSBOA (Council of Small Business Organisations Australia) and CPA Australia, we’ve developed a website that is a step-by-step guide to applying for finance.
The ‘financing your small business’ website contains templates, checklists and easy to understand information about everything from creating a business plan, through to using a trusted advisor and the types of finance available.
“There are more than two million small businesses in Australia, that employ more than four-and-a-half million people. They are the true engine room of the economy and banks understand that having access to finance is vital.
“The best piece of advice that I could give anyone thinking of taking that next step of realising their dream of starting a small business, or expanding and growing their current business, is to explore the new website www.financingyoursmallbusiness.com.au.
Note: Anna Bligh and COSBOA, CEO, Peter Strong will be available for in-person interviews Friday 12.30pm Melbourne CBD
Contact: Kelly Stevens 0475 741 007
- Always submit a business plan with the application
- Consider using an adviser to assist in your loan application.
- Meet with your bank to discuss the loan application
- Include your businesses’ financial forecasts
- Establish a debt term
- Submit all of the necessary paperwork with the application
- Don’t borrow more than you can afford
- Ensure you understand the terms and conditions before submitting your application
Access to credit opens up opportunities and fulfills aspirations. Getting it right requires the right balance between consumer protections and the flow of credit.
Interviewed by AM’s Peter Ryan, ABA CEO Anna Bligh talked about the substantial drop in loan deferrals since their peak during the pandemic, falling from 900,000 to 300,000.