SMEs looking for additional capital on road to COVID recovery

Small business loan

Australian SMEs are looking for more than $130 billion of additional capital through business loans to fund their recovery and growth in the wake of the COVID-19 crisis, according to new research. The American Express SME Recovery Survey, designed to ascertain how SME owners have coped with the change in business conditions in 2021, reveals that the majority of Aussie SMEs (53 per cent) are optimistic about the year ahead despite the ongoing pandemic.

Tempered optimism

Those optimistic sentiments are tempered, however, by the two in five of them will need a loan this year to stay afloat and get back on a growth trajectory. Over half of the SMEs surveyed (55 per cent) cite the Government’s JobKeeper scheme as having played a pivotal role in keeping their doors open during the pandemic – with that safety net scheduled to end in March, businesses looking for additional capital say they need just under AU$100,000 on average.

“Many businesses are still feeling the full impact of the Covid-19 crisis, while others have rebounded with their sights firmly set on growth,” Martin Seward, Vice President of Global Commercial Services for American Express Australia, said. “We have taken a transformational step to evolve our business beyond our existing card offering to help support businesses on their journey forward.”

Growth the priority

The research reveals that nearly two in five SMEs are making the pursuit of finding new ways to grow their business their top priority this year. Of those businesses, more than a quarter an appropriate level of additional funding will help them achieve that growth. That is easier said than done, with nearly half of SMEs who sought funds from other lenders during the pandemic saying they struggled to bring in the funds they wanted due to very complex loan application processes and / or the requirement that they put their personal assets on the line as security for a loan.

“We don’t believe SME’s growth should be stymied by red tape or unneeded complexity, and certainly not at the expense of having to put your house or business on the line – something that extraordinarily a third (32 per cent) of SMEs needed to do to raise capital during the pandemic,” Seward said.

American Express has partnered with global originations platform, ODX, to offer unsecured loans of between $5000 and $250,000 to SMEs in Australia.

“We are thrilled to be partnering with American Express in their efforts to help businesses recover and grow,” Brian Geary, President of ODX, said. “Given the dramatic shift in customer needs and preferences during the pandemic, it’s more important than ever to provide them with a digital and frictionless experience to tap into financing.”