New data from the Australian Banking Association shows that banks have approved more than 500 new loans to small and medium businesses and sole traders each day for over 250 days.
Since February, more than 128,000 SMEs have been granted new loans, with the average loan size at $320,000.
Total lending approved to businesses of all sizes is now more than $200 billion since February, according to the ABA.
ABA chief executive Anna Bligh said approval rates for SME loans have remained high through the COVID-19 crisis, with around 70 per cent of loan applications going through.
Ms Bligh also noted that in the six weeks up to 7 October, the banks approved loans of more than $9 billion to SMEs and sole traders.
“The clear message from this new data is that Australia’s banks remain open for business for small-business customers,” Ms Bligh said.
“The banks’ commitment to small business has been supported by a number of government and regulatory measures, including the RBA’s Term Funding Facility, changes to business lending rules, the instant asset write-off and the SME loan guarantee.
“These small businesses will drive Australia through the crisis, and after it has passed, employ millions of Australians as the economy rebuilds.”
The new data comes as the government looks to reform credit regulations, replacing the current practice of “lender beware” with a “borrower responsibility” principle in a bid to speed up the approval process.
The government contends that while small-business lending was never intended to be captured by the Credit Act, lenders’ prescriptive interpretation of the obligations has seen some small businesses struggle to obtain a loan, particularly where it is difficult to separate their business from their household.
While legislation has yet to surface, accountants have since been cautioned against agreeing to sign off on a client’s ability to repay a loan, as lenders eventually look to transfer due diligence onto borrowers.
Jotham Lian is the 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.