Speaking at a panel discussion at Xerocon in Brisbane, NAB executive general manager Leigh O’Neill noted tighter lending conditions in the wake of the ongoing Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, but acknowledged how accountants were crucial in enabling small business clients access to funding.
“[We see an opportunity] in planning and optimising what they have before they necessarily need to run and go and get funding and when they do need funding, I think there is a real opportunity with data and the accountant and the customer working together to think about what the future looks like and have factored that in, not just retrospectively looking in the past and that’s where increasingly, data gives us the opportunity to think about how to help customers plan to optimise their business,” said Ms O’Neill.
“I hope it doesn’t mean that customers think that lending won’t be available to them… I hope customers still have conversations with their accountant to think about how they might get growth.”
Likewise, alternative lender Moula believes accountants have a key role in helping small business clients secure loans, with the financial provider basing the core of its underwrite on accounting data.
“Our core of underwrite was accounting data and the reason it was core is definitely about time to money but, more importantly, it is about the responsible lend,” said Moula chief executive Aris Allegos.
“It enables us to effectively underwrite and determine serviceability in effectively the most comprehensive way versus a very one-dimensional bank feed.”
With Xero estimating that small businesses will borrow over $80 billion across the next 12 months, accountants have been urged to start opening up conversations will clients ahead of time.
“Fundamentally, I don't think there is one party that can fix all this. $80 billion is large and we need all of the players in the ecosystem to make that happen,” said Xero financial industry director, Ian Boyd.
“[With the royal commission], we see that there’s a better focus on the customer outcome and that’s not a bad thing.
“If the data is good quality, you’ll get better decisions, better access and better affordability.”
Smart Business Solutions director Shannon Smit also believes the tighter credit market will lend itself to the proactive accountant.
“We’ve had to go into meetings a lot more prepared and having those cash flows. It’s made clients to be a bit more proactive when they go into funding and I think it's not a bad thing, it's better that we're in a situation where the money is being lent based on a real plan, real cash flow projections,” said Ms Smit.
“If we’ve prepared the three-way cashflow, we’ve got projections, the client has got a business plan, we’ve been able to get funding across the line and if they had just gone off today's numbers, and the bank and alternative lender didn't take a step back [and look at the future] and the client didn’t have a proactive accountant, they probably wouldn't have been able to get the funding unless they did the funding against the house.”
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.