Is an uncooperative big bank holding back your business? There is no doubt the big banks can often be conservative lenders when it comes to small businesses. Limited approvals aren’t the only way larger banks hold up the growth of SME’s who are looking for funding. In addition, big banks often require SMEs to open a specific type of business account, which can be restrictive and may not suit all business needs.
Here’s how they do it:
They are Too Slow
If you own a small business and have tried to get funding from a big bank, you know how slow that can be. Opening accounts or accessing business banking services can also be a lengthy process. The whole process probably starts when you make an online enquiry about a loan with the bank assuring you of quick feedback. Every other thing from that moment is snail-paced. You are often required to provide additional information, prove you’re a clever business person a dozen times over and then offer your signature on several documents again and again. The whole process, unfortunately, is slow and time consuming.
They use Outdated Means of Communication
This is the computer age and that means there are ways you can quickly engage with your lender, i.e. online chat services, apps, etc. You won’t get very far with this when it comes getting funding from a bank. Agreed, you can submit documents online, but then a representative will have to review those documents and get back to you, and there is no given timeframe for this. While some banks allow you to apply online, the process is often not as streamlined as advertised. In today’s digital world, consumers are looking for solutions that they can take with them wherever they are going. In our experience, most banks are just not ready to do that when it comes to loans.
They are Not Flexible
Banks tend to tie down their clients for long periods. Banks may charge various fees, including monthly fees, for maintaining business accounts. A short-term loan can easily extend up to 5 years when banks are involved. This means you’re stuck in a loan solution that won’t grow and change as your business does. However, when you operate with other funding providers, there are no lock in contracts or lengthy complicated documents for you to complete. With the alternatives, you can enjoy flexible repayments by choosing to get funding only when you need it. Alternative providers often offer fast access to funds and more flexible payment options tailored to business needs.
Traditional banks may also require collateral for loans, which can be a significant barrier for some SMEs seeking access to finance.
If you’re looking to grow your business with a few extra funds and want a quick and simple finance solution, talk to Unsecured Finance Australia about how we can help you meet your business finance needs.
The information provided here is general in nature and does not constitute financial advice; you should consider your own financial situation and seek professional advice before making any decisions. Security is also a key consideration—ensure your online banking and business information are protected.
Managing business cash flow is critical, and the right banking solution should support your growth and ongoing business needs.
Introduction
In today’s fast-paced business landscape, small and medium enterprises (SMEs) are the driving force behind economic growth, job creation, and innovation. These businesses are essential to the health of the global economy, contributing significantly to both local communities and international markets. For small business owners and medium enterprises, managing cash flow and accessing the right financing solutions are crucial to staying competitive and achieving sustainable growth. As the needs of SMEs evolve, so too must the banking services designed to support them. Understanding how to navigate the banking landscape—whether it’s choosing the right services, managing cash flow, or securing financing—can make all the difference in helping your business thrive. This guide explores the unique challenges and opportunities facing SMEs, and how specialized banking solutions can empower your business to succeed.
What are SMEs? Definition and Importance
Small and medium enterprises (SMEs) encompass a wide range of businesses, from sole traders and family-run shops to medium-sized enterprises with hundreds of employees. In Australia, SMEs are the backbone of the economy, making up a significant portion of all businesses and providing millions of jobs. According to the Commonwealth Bank, SMEs are not only vital for employment but also for driving innovation and fostering entrepreneurship across both emerging markets and advanced economies. Their agility and adaptability allow them to respond quickly to market changes, making them essential contributors to economic growth and resilience. The success of SMEs is closely tied to the overall health of the Australian economy, and supporting their growth is a priority for banks, policymakers, and business partners alike.
The Relationship Between SMEs and Big Banks
For many years, traditional banks have been the main providers of banking and lending solutions for SMEs. However, the relationship between small and medium enterprises and big banks has become increasingly complex. Many business owners feel that traditional banks rely too heavily on rigid credit scores and automated processes, often overlooking the unique circumstances and potential of each business. This has led to a growing demand for more personalized banking services and judgement based lending decisions. Banks like Judo Bank are leading the way by focusing on building strong relationships with SME customers, offering tailored solutions, and taking the time to understand each business’s specific needs. This shift towards relationship-led banking is helping to rebuild trust and provide SMEs with the flexible, responsive support they need to grow and succeed.
Banking Services for Medium Businesses
Medium businesses often face more complex financial challenges than their smaller counterparts, requiring a broader range of banking services to support their growth. The Commonwealth Bank and other major banks offer specialized solutions designed to help medium businesses manage cash flow, finance new equipment, and access credit when needed. These services include business loans, lines of credit, equipment financing, and advanced cash flow management tools. By offering a comprehensive range of banking products, banks can help medium businesses streamline their operations, make strategic investments, and respond quickly to new opportunities. With the right support, medium businesses can manage their finances more effectively and drive sustained growth in an increasingly competitive market.
Cash Flow and Financial Management Challenges
Managing cash flow is one of the most persistent challenges for SMEs, with many businesses experiencing financial difficulty due to late payments, unexpected expenses, or seasonal fluctuations. To help address these issues, banks and financial institutions provide a variety of lending solutions and cash flow management tools, such as invoice financing, equipment financing, and flexible lines of credit. In addition, the use of accounting software and online banking platforms allows business owners to track payments, monitor expenses, and make informed financial decisions—all while saving valuable time. By leveraging these resources, SMEs can improve their cash flow, reduce financial stress, and stay focused on achieving their business objectives. Access to the right financial tools and support is essential for helping small and medium enterprises overcome challenges and continue to grow.
