The Council of Small Business Australia (COSBOA) recently participated in a roundtable discussion about small-business finance convened by the Reserve Bank of Australia (RBA).
The meeting was held in Sydney and co-chaired by RBA Governor Philip Lowe, COSBOA Chairman (and Australian Convenience and Petroleum Marketers Association CEO) Mark McKenzie, and Australian Bankers Association Chairman (and ANZ CEO) Shayne Elliott.
Mr McKenzie noted that while there have been significant improvements in product simplification recently, many small-business owners still face difficulties in securing affordable lending products – often forcing them to seek out non-traditional forms of financing and/or stall business growth plans.
“Access to affordable business lending products is an essential requirement of the small-business ecosystem and Australia’s collective inability to address the current difficulties represents a significant opportunity cost for our country in terms of untapped employment growth in the small-business sector,” he said.
Participants in the roundtable heard about the experiences of the owners of six Australian businesses who outlined recent and significant difficulties in securing capital needed for both start-up and growth.
“The issues highlighted by these business owners pointed to problems with accessing the right finance products, limited knowledge of finance products and substantial difficulty in navigating the associated red tape,” COSBOA CEO Peter Strong said. “One issue that gained interest was the opportunity to collect and use better data on small-business operations to support banking decisions on loan applications.”
Other key messages included a stated desire of small-business owners to run their businesses without being told what to do by regulators, government or banks, and a call for access to a range of products that are better tailored to the specific needs of small-business owners – most of whom are more than capable of looking after their own interests without being overprotected by onerous lending regulation.