The Victorian Government has launched a new tool to help small and medium businesses find a loan provider, but a leading financial services researcher has warned that SMEs are still yet to see the full benefit of the RBA’s rate cuts.
Business Victoria’s Find a Loan service was launched this morning. It allows SMEs from around the country to enter details such as the amount they need and the form of loan required (upfront or at-call, fixed or variable loan).
The tool then spits out a range of loan options with details on the lender and monthly repayments. SMEs can also get assistance with credit applications, including advice on documentation required.
The site’s database of loans is provided by independent research company InfoChoice.
But InfoChoice chief executive Shaun Cornelius warns that he remains worried about the ability for SMEs to get funding.
“We are concerned by some of the feedback we receive from small businesses, who are saying it is harder than ever to get funds. It’s tough economic times and access to funds is crucial for small business, and that also flows through to employment and the strength of the economy.”
While the Reserve Bank has lowered the official cash rate by 4% in the last six months, business loans have only fallen by an average of 2.68% and overdrafts have fallen by an average of 2.41%.
But there are good deals if entrepreneurs are prepared to shop around. For example, Heritage Building Society has a rate of 5.7% on a business loan, while Bank of Queensland has the highest rate at 8.55%.
Cornelius says the message is clear: shop around.
“It’s a 10 minute exercise to go online and have a look at the range of rates and you can save a lot of money.”