There has been a significant turnaround in the results
A growing number of Australian small and medium-sized enterprises (SMEs) are turning to non-bank lenders, according to the latest ScotPac SME Growth Index Report.
The report, now in its 10th year, revealed that 90% of SMEs are open to partnering with non-bank lenders — a significant increase from 2018 when 44% of SMEs said they would not consider non-bank lending.
In 2024, over half of the SMEs planning to invest in their businesses intend to work with non-bank lenders, marking a substantial rise from 2014, when only 7% of SMEs sought funding outside traditional banks.
The ScotPac report indicates a record 52% of SMEs plan to use non-bank lending to finance new business investments, surpassing the 42% who plan to seek loans from banks. Additionally, 59% of SMEs plan to invest in their business within the next six months, maintaining levels seen in 2023, but down from a peak of 65% in September 2019.
According to the report, the top reasons SMEs choose non-bank lenders include easier onboarding processes, quicker access to funds, and the ability to avoid using personal property as collateral.
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ScotPac chief executive Jon Sutton (pictured) attributed the shift towards non-bank lending to greater awareness of specialised financial products and the speed and flexibility these lenders offer.
“Most owners who are planning to invest in their business want quick and easy access to working capital, preferably without having to put up their home as collateral,” Sutton said. “At ScotPac, we understand that time is a business owner’s greatest asset, and sometimes 24 hours can be the difference between seizing or losing a new opportunity.
“That is why, over 35 years in business, ScotPac has developed a comprehensive suite of fast and flexible lending products to support SMEs in just about every investment scenario.”
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