Which SME sectors are borrowing (growing)
Borrowing trend.
SME business sentiment has been subdued over the past year. More businesses are seeking longer terms to a maximum of 60 months for existing loans to help manage constrained economic conditions.
Who is borrowing?
Businesses with a turnover of more than $20 million are increasing their borrowings by 50 per cent and those earning between $10 million and $20 million by 73 per cent. These businesses are predominately in the financial and insurance services; accommodation and food services; and professional scientific and technical services.
SME businesses in Victoria, South Australia and New South Wales are borrowing more, particularly in the accommodation and food, IT and media, administration services and healthcare sectors.
Who is being knocked back?
There has been a 35 per cent increase in applications being knocked back, or a 118 per cent increase when compared to the same period in the last financial year.
The major reason being an inability to service a new loan even with extended payment terms with many SMEs still in recovery mode.
If you are considering applying for business finance or looking for a better deal, contact Word of Mouth Finance because we have access to more than 75 lenders.
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This article is not intended to provide specific legal or financial advice, and the content contained therein is subject to change.
Martin Bailey is a Credit Representative (522104) of Buyers Choice Licencing Pty Ltd ACN 626 172 281 (Australian Credit Licence Number: 509484)
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