Peter Arnold (pictured above), director at GAP Business Loans, emphasised the significant role private lenders play in supporting small and medium enterprises (SMEs), as they grapple with high borrowing costs and increased operational expenses.
“SMEs are struggling against high borrowing costs with the official cash rate at a record-high 4.35%, putting pressure on already tight margins,” Arnold said.
He noted that the Reserve Bank reported higher-than-expected inflation, further straining SME finances.
SMEs often require short-term financing to manage cash flow or seize growth opportunities.
Traditional banks, with their extensive paperwork and slow approval processes, often fail to meet these urgent needs.
“Private lenders like us can often provide funding decisions within days, compared to the lengthy processes of traditional lenders,” Arnold said.
This quick turnaround allows SMEs to maintain smooth operations and stay competitive.
For SMEs, the speed of securing funding can outweigh concerns about loan rates.
“In these cases, the quick access to funding offered by private lenders is a much bigger consideration than potentially higher interest rates,” Arnold said.
Private lenders also offer flexibility by assessing each case individually.
“We assess each case individually, understanding the unique circumstances and needs of our clients,” Arnold said.
This personalised approach allows private lenders to recognise a business’s potential, even if it lacks an extensive financial history.
Private lenders can help SMEs navigate complex financial challenges, such as meeting obligations to the Australian Taxation Office (ATO).
“If the SME owns property, a private lender can facilitate a lending solution to meet these ATO obligations and allow the business to continue trading,” Arnold said.
By offering a quicker and more agile approach, private lenders provide essential capital for SMEs to continue growing and contributing to the economy.
“This provides them with the capital they need to keep growing and contributing to the economy,” Arnold said.
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