Small businesses can now borrow up to 80% of the property value
ING Australia has announced changes to its commercial SME lending policy, expanding borrowing capacity for small businesses.
Effective immediately, the bank has increased the maximum loan-to-value ratios (LVRs) across various property types.
Small businesses can now borrow up to 80% of the property value for industrial properties (up from 60%), for retail properties (up from 65%), logistics properties (up from 70%), and office, mixed-use, and residential properties for acceptable business purposes (up from 75%).
For loans with an LVR above 75%, a debt service coverage ratio (DSCR) of 1.4 at the actual interest rate will be required, depending on the borrower’s industry and the type of security.
ING has also made enhancements to its assessment process to improve turnaround times and consistency in credit decisions. The current processing time for new loans is now five business days.
“I’m very pleased to announce these changes,” said Ray Esho (pictured above), national sales manager SME lending at ING Australia. “We want to do more to help small businesses, and this is one of more changes to come to make it easier for SMEs to choose ING for their property funding.
“We’ll continue to source broker feedback as we enhance our SME offering, with the aim of always offering simple, transparent policies, a great origination experience and the right sales and support teams – ultimately driving the best outcomes for customers.”
Esho said ING had allocated additional credit resources and also redesigned a number of processes to speed up turnaround times.
“We’re confident we’ll maintain within current SLAs of 5 days maximum, even with the policy changes.”
The changes to the commercial SME lending policy were motivated by market demand. “It’s what customers want and this aligns with what brokers have been telling us.”
Esho said it was no secret that economic pressures were affecting Australian businesses.
“Despite the wider economy showing resilience there’s still a way to go, particularly for small businesses. A recent study by MYOB indicated a downturn in SME economic performance. We recognise the vital role of SMEs in Australia’s economic health and driving innovation. We want to help with greater flexibility to support their business operations.”
Esho, who spent more than a decade successfully leading ING's residential mortgage sales through the broker channel, moved into the role of national sales manager SME lending in May.
Earlier this year, the non-major bank reported significant growth in its 2023 financial report, with a 3.9% increase in loans, reaching a total of $73.9 billion. This growth includes a $3.3 billion increase in mortgages, a 19% rise in consumer loans to contribute an additional $0.1 billion, and a 3% increase in Wholesale Bank adding $0.3 billion.
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