More Australian SMEs intend to invest in their business – and an increasing number of them are open to partnering with a non-bank lender to do so.
The most recent SME Growth Index Report from ScotPac found that 59 per cent of SMEs plan to invest in their business in the next six months.
The findings were consistent with data released by the Australian Bureau of Statistics (ABS) last week. The ABS found that capital expenditure for the 2023-24 period saw an increase of 10.2 per cent year-on-year.
Meanwhile, the number of Australian SMEs open to partnering with a non-bank lender has doubled in the past six years, according to the Growth Index Report. In fact, 90 per cent of surveyed SMEs were open to non-bank lending this year, up from 44 per cent in 2018.
Of those funding new business investment, 52 per cent are planning to use non-bank lending, up from 15 per cent in 2018. The results follow a growing trend of SMEs turning to non-bank lenders to secure funding. A prior iteration of the report found that 80 per cent of SMEs have partnered with more than one lender to secure working capital.
According to the report, the top three reasons SMEs are seeking out non-bank lenders were: easier onboarding processes, faster availability of funds, and the peace of mind of not having to borrow against the family home.
ScotPac CEO John Sutton, pictured above, attributed the upward trend to greater awareness of specialist business lending products on the market.
“Most owners who are planning to invest in their business want quick and easy access to working capital, preferably without having to put up their home as collateral,” Sutton said.
