They can help with cash flow, lending options, says CAFBA CEO
Small to medium businesses struggling with cashflow issues, higher interest rates and inflation should be seeking out their brokers for help as soon as possible, says CAFBA CEO David Bushby.
The head of the peak body for commercial and asset finance brokers in Australia said this was the advice that brokers always gave to their clients who were facing financial difficulties.
“Talk to them early so that they [brokers] can actually try and assist them through any challenges they might be having,” Bushby (pictured above) said.
His comments follow the release of CreditorWatch’s Business Risk Index for August, which revealed that the rate of business failures in Australia had hit 4.95%, the highest level since January 2021 during the peak of COVID-19.
CreditorWatch attributed the increase in business failures to weak consumer spending, high inflation and rising interest rates.
Bushby said some business sectors, such as hospitality, tourism and construction, were facing economic challenges.
“If that’s your business, your clients aren’t necessarily looking to get out and find as much finance as previously … they’re tightening their belts a bit and they’re delaying decisions and that is having an impact on our brokers.
“The advantages our brokers bring to that is, rather than small business going directly to banks, brokers may well be able to find better financial options that do work for them.”
Bushby said brokers could assist their business clients with cash flow lending if that was a suitable solution.
“Small businesses who are struggling and who have a relationship with a broker should go and talk to them about it. The broker may not have the answer but maybe to assist or ease those challenges to some degree. They can discuss and examine what options they have.”
Higher interest rates in the hospitality and tourism sectors aren’t necessarily affecting the business clients but rather the clients’ customers, Bushby said. “They don’t have as much disposable income so they’re not spending on leisure activities to the same degree, which then flows through.”
Diversification
Bushby said the challenges in certain sectors demonstrated the importance of diversification for CAFBA broker members.
Some sectors of the economy, such as agriculture and mining and transport, were performing strongly and demand for yellow goods (heavy machinery) remained high.
Bushby acknowledged that brokers who didn’t specialise in these areas might find it difficult to diversify but during economic challenges adaptation was needed.
“We offer [brokers] a lot of short courses which may be relevant and useful – reading [business] books and understanding cash flow … so that when they look at their clients’ businesses, they can understand them better.”
Bushby said CAFBA recommended that brokers use the CAFBA network to talk to other brokers who were experienced in those sectors.
He praised the collegiate nature of commercial and asset finance brokers, who despite being in competition with each other, were only too willing to assist newer entrants who needed advice or guidance in structuring complex deals. “If people reach out, somebody will help them.”
CAFBA also offers the only vocational qualifications for brokers targeted at business lending.
These are provided through the Institute of Strategic Management and include a Certificate IV in Financial Services; Diploma in Financial Services; Bridging Program, Diploma of Financial Services, and Certified Lease & Finance Professional (CLFP).
CAFBA National Broker and Financier Awards
Meanwhile, it was a huge night of celebration for commercial and asset finance brokers, when CAFBA hosted the 2024 National Broker and Financier Awards at The Ritz-Carlton in Melbourne on September 12.
Awards were presented in 23 categories covering commercial finance brokers, asset finance brokers, lenders, BDMs, aggregators and a Women in Finance Excellence Award, which was won by Sammi Haines of Coastal Finance.
Bushby said CAFBA had been acknowledging excellence among its broker members for a long time, but the awards night had only been going for five or six years and had grown enormously.
“It went from being about 100 people in a small setting to what we saw just over a week ago, a beautiful night in a lovely setting with about 400 people – fully subscribed.
“It’s a proper gala where people have the opportunity to catch up with their colleagues and friends from across the country and celebrate excellence … the intention from CAFBA is to make the awards something that people aspire to.”
One of the points of difference between the CAFBA awards and other awards is that they are industry nominated and voted, said Bushby.
“We don’t decide who the winners are based on how elaborate or great an application they’ve put to us – it’s all industry voted. We ask lenders to nominate the broker they think are doing the best job and we ask brokers to nominate the aggregators and lenders they think are doing the best job.
“We don’t make the decision, we just collate the votes,” Bushby said.
