An “enormous level of anger and frustration”

The current greater Sydney lockdown, as well as recent snap lockdowns in Victoria and South Australia, have left many SMEs feeling marginalised as their livelihoods become materially and immediately impacted by government measures to stop the spread of Delta, according to Interim Finance credit manager Trent Littleford.

“The feedback we receive is that there is an enormous level of anger and frustration out there,” he told MPA. “Decisions about their business and future are being made by those who, while responsible for the current situation, are not financially affected.”

As an industry group, SMEs are very fragmented and don’t have a strong advocacy body – unlike that of the public service, he added.

While government support has been increased for NSW businesses impacted by the lockdown, many in the hospitality and retail trade face an uncertain future if current restrictions extend beyond August 28.

Southeast Queensland businesses have also been hit with an extended lockdown after a surge in new Delta cases proved a concern for health authorities.

Read more: Brisbane lockdown extended

Littleford said there were options in the market for those businesses struggling to stay afloat throughout lockdown closures and that brokers could play a pivotal role in helping.

“Financial products are certainly available at both the secured and unsecured level,” he said. “Cash flow loans that have pre-paid interest components are a sound alternative right now. This places money in the hands of SMEs very quickly without the added burden of adding to monthly serviceability. Most providers here will be in the non-bank space as they have the ability to transact at a much swifter level than conventional bank funding.”

Read next: Latest lockdown restrictions to have major impact

He added that flexible line of credits also came with many benefits.

“Ready access to an approved line of credit is an enormous comfort to an SME,” he said. “Historically, term loans that were fully drawn down, based on the maximum a client would need were the norm. A line of credit option provides the comfort of the accessible credit with the added benefit of only paying for what you draw down.

“Of course, this is not a new concept in banking circles but when this is offered by a non-bank on a no-doc/lo-doc format - it is a terrific benefit.”

He said brokers could best help SME clients by making contact to talk through their requirements and present options.

“A full refinance to a lo-doc first mortgagee may seem like the answer but if the requirement is only for $50k - $100k sometimes you are using a sledgehammer to crack a nut,” he said.