Smes and finance - an opportunity?

SMEs are the backbone of our economy 

and yet they seem to  “be stiffed” by the banks! 

To say that they are  under-serviced by the finance sector Is an understatement 

The Problem  for SMEs

• Even with Covid gaurantees - it was nigh impossible for an sme to het a bank loan from a traditional bank without security or a guarantee from someone other than the founder
• Many small businesses have been knocked back for finance
• The Australian Bureau of Statistics show that the lack of access to finance is the most common barrier to innovation
• Fintechs have begun meeting the demand, but have their quirks 

The funding gap 

The Problem  for Investors

Investors - who invest in equity and hybrids (a mix of equity and loan are a great source.

Money that is not getting good returns need to find a home

The Connection 

There is money out there - but how do you 

1. Find it ?
2. Negotiate the best repayment terms for you?
3. Find the right lender / investor  for your business
4. Understand the different forms of finance ? Nomad, peer to peer lending, loan backed by security, equity Or a mix?

This is where the finance broker comes in and why there role is critical 

The $2m to $10m turnover range SME have the opportunity for exponential growth - and this is where The opportunity is!

Challenges

The Banks

Most SME loans are currently secured by housing - lack of collateral is the most common reason for a business’s inability to access finance; 37% of all rejections can be attributed to this issue.

The Fintechs 

For the last five years, so-called peer-to-peer lenders have connected investors and borrowers to provide more than $20bn in finance, faster than the banks ever could.

The Investors

Where to find them?

 many are unsophisticated 

The VCs invest - but not in many 

Connecting SMEs with lenders  and investors is a challenge  – and beefing up risk assessment in the process is a requirement by the SME 

The Opportunity 

SMEs, investors and indeed brokers are looking for viable alternatives to the banks, but not at the cost of security.

A broker’s job is not just to secure finance for a client, but to find the right finance.

• banks 
• fintechs 
• Vcs
• Bomad
• Investors - fool family and friends 
• Professional Investors
• Stock exchange
• Trade sale
• Mergers and acquisitions 

Good advice and great financial management from brokers is crucial for the success of small businesses over the next 10 years 

Who can relate?

Who needs money? 

Whose keen to invest and play in this space 

Let’s explore the opportunity 

Inspired by https://www.marketlend.com.au/blog/editorial-the-true-role-of-the-sme-broker/