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Accountant, broker relationship crucial in SME lending success

Accountants will need to work closely with finance brokers to help form a more cohesive SME “consultancy team”, says one leading broker.

Business Annie Kane 30 September 2019
— 3 minute read

Speaking on Prospa’s “Future-Proof Your Business” webinar, Equilibria Finance director and broker Anthony Landahl said that he believed brokers and accountants have to work together to ensure they are educating one another around the business financials and finance needs of their SME clients, to provide a more holistic offering.


The finance broker particularly noted that many SMEs still rely on using the equity in their own homes to finance their small businesses, despite there being a range of alternative solutions in the market that may benefit them more.

Educate yourself

He said that brokers therefore needed to first educate themselves on the range of options available outside of asset-backed loans “because it’s not always just about a term debt against an asset. There are a lot of other options for businesses.” 

Mr Landahl explained: “From a broker’s perspective, it comes back to educating ourselves on how to interpret the financial reports. And what I mean by that is understanding some of the key ratios. Can you interpret if there is a cash flow issue in business? And how do you then provide a solution for that? How do you interpret that and assist with sign of the growth trajectory? And what’s the right finance to structure around that?

“So, you really need to take it upon yourself to educate yourself not only in interpreting business financials, but also understanding their needs, as well the different solutions in the marketplace (whether it’s cash flow, lending, invoice finance, term debt, asset finance etc.). Then it’s really [about] understanding how those solutions will be applied to specific businesses. 

“Because every business is different. Every business has different challenges. Every balance sheet is different. Every profit loss statement is different. And every business owner’s goals and objectives are different as well. 

“So, it’s upon the broker to educate themselves in understanding and interpreting financial statements, and then understanding all of the different options in the market to assist those businesses with a strategy.”

The Equilibria Finance broker said that this would remove the burden and confusion from SME owners.

He continued: “If you think about the life of a small business owner, they’re essentially running the business — whether that be a coffee shop or an accounting practice or a building firm. Whatever it may be, their focus is on running their business, and they might not be aware of a lot of the different funding opportunities.”

Educate others

Mr Landahl said once finance brokers are across all the options, they can then educate their SME clients as well as their clients’ financial advisers, such as accountants, too.

“Part of our role is to actually get out there and educate the accountants [and] the advisers that we work with about some of the different solutions that are in place,” he said.

“[So that when] their small business clients come in, [they can] sit down, look at their financials, look at their growth strategy, and they are going to manage that growth? And how are they going to fund that growth or fund their working capital requirements? 

“Looking at some of the different options around, that may not involve a 20-year equity loan. And part of it comes back to us educating those accountants and advisers we work with as well who are seeing those SME clients every week.”

Mr Landahl was joined by two accountants on the Prospa webinar, Justin Mastores of the Rees Group and Davie Mach of Box Advisory Services. 

Both accountants agreed that brokers and accountants could work more closely together to help make their SME clients, and each other, more aware of the finance options available to businesses.

Mr Mastores commented: “I think, sometimes, business owners don’t know that there are other options. 

“We have a broker that works in our office in Melbourne, and being able to have a broker and an accountant sit down together with a client and look at other options and say: ‘OK, are you maxed out on your 80 per cent LVR on your property? And what are some of the other cash flow funding options available?’ 

“Whether it’s a debtors book or fit-out finance or other finance that is required. I think it’s about sitting down [together] and being proactive.”

Likewise, Mr Mach said: “It’s up to us, as well, to educate our clients and speak to the mortgage brokers and speak to their accounts to let the clients know that there are different options out there that we [or they] can possibly take as well.”

Accountant, broker relationship crucial in SME lending success
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