A new Xero survey of 700 accountants and bookkeepers, and 221 small business owners, has found that lending approval continues to be a bugbear for small businesses.
Fifty per cent of all respondents said they lacked sufficient capital to achieve their potential, with many businesses noting they were unwilling to pledge their home as collateral.
Xero small business advocate Angus Capel said that Prime Minister Scott Morrison now needs to commit to his pre-election promise of a $100 million Australian Business Growth Fund and its previously announced $2 billion Australian Business Securitisation Fund.
“The new government has an opportunity to impress the nation’s small businesses by implementing their campaign proposals quickly, such as seeding the Australian Business Growth Fund with $100 million as the Coalition promised,” Mr Capel said.
“Access to bipartisan finance initiatives will help fill a capital hole for small business, but it will also take a combination of technology, data and competition.
“Open banking could be at the centre of this. It will help small business owners, the lifeblood of our economy, better understand their full financial position, get the best deal on loans they need to manage their business, and help remove much of the paperwork that makes credit applications so daunting and time-consuming. It will also give lenders greater confidence in making unsecured loans.”
The survey also found that 47 per cent of all respondents said they struggled to find suitable workers due to a scarcity of skilled, affordable employees in their region.
“The government has acknowledged a skills shortage and proposed roughly a billion dollars to help expand vocational training and encourage apprenticeships,” Mr Capel said.
“The sooner the government deploys this funding, the sooner small businesses can help lift employment.”