The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has seen tighter lending conditions, with many clients starting to nominate access to credit as a key external risk to their growth.
Speaking to Accountants Daily, RSM principal Jarrad Turnbull believes accountants will be the key to helping their business clients continue to be able to access finance.
“Small businesses are already feeling the impact of the banking royal commission, with the lending criteria tightened significantly over the last 12 months,” said Mr Turnbull.
“In obtaining finance, more information is required to be provided to lenders which results in the time line of an application being longer than in the past.
“It is more important than ever that businesses engage with their accountants and financiers well in advance of requiring additional funds,” he added.
“This can include having up to date financial records, budgets and clear business and management plans. After the finance is approved, businesses can expect more regular reporting requirements to their financiers.”
His views echo those of NAB executive general manager Leigh O’Neill, who had earlier highlighted the importance of accountants in helping clients in the application process.
Institute of Public Accountants (IPA) general manager of technical policy Tony Greco also said that early planning was key to tackling the tougher lending landscape.
The tighter lending space has seen accountants and their small business clients increasingly looking to alternative lenders for sources of finance, which is seeing specialist mortgage brokers and lenders populate the market.