Reckon’s survey of 1,150 small business owners found that 74 per cent still turned to banks as their first lending option, followed by their family at 20 per cent.
Further, more than half of respondents indicated that they used their personal credit card to process work-related payments.
However, recent studies have found that the alternative lending space has been growing with KPMG revealing that Australia’s alternative finance market has grown 53 per cent last year.
Further, ASIC’s second survey of the marketplace lending industry for the 2016-17 financial year showed $300 million in loans written to consumers and SMEs, nearly double the figure for 2015-16.
Accounting software providers have been keen to cash in on this burgeoning market, with major players like MYOB aiming for “exponential” growth in its loans arm this year.
Similarly, Reckon Loans has announced that it has surpassed $10 million in loans to small businesses in the past 18 months.
Reckon managing director, Sam Allert, believes there is an untapped opportunity within the alternative lending landscape.
“The online lending market in Australia is has grown at unprecedented speeds, clearly demonstrating the demand for quick and fuss-free access to business-critical capital amongst small businesses – as cash flow continues to be a massive pain point for them,” Mr Allert said.
“This milestone is not only significant for Reckon, as we look to build a more fully integrated platform that offers a complete suite of services from small business loans to point-of-sale systems and software.
“It also signifies the strength of Australia’s non-bank finance sector and importantly, the untapped opportunities within the online lending market.”
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.