SME lenders need speed, ease, and good customer service to attract customers

And the most important aspect of any finance option they require is reform to the onboarding process with 95 per cent saying they want the least amount of paperwork and administrative hurdles.

This percentage has risen from 90 per cent at the beginning of the pandemic in March 2020.

According to the latest round of ScotPac’s biannual SME Growth Index, the next most critical factor was rapid credit approval, with 72 per cent of SMEs nominating it as key to their decision-making, up from 67 per cent in March 2020.

Third on the list was good customer service with 36 per cent saying consistently high levels of customer service were highly valued, up from 31 per cent in March 2020.

ScotPac’s biannual SME Growth Index is Australia’s longest-running research report on SME sentiment towards revenue growth prospects.

The round 17 research was conducted by East & Partners that interviewed 718 SME enterprises with annual revenues of $1 million to $20 million to September 2022.

The SMEs surveyed have operated continuously for an average of 13.9 years and manage an average of 59 full-time employees.

Sectors represented in the survey included manufacturing (14.5 per cent), business services (14.1 per cent), retail (11.4 per cent), wholesale (11.0 per cent), personal/other services (10.6 per cent), construction (9.6 per cent), and 28.8 per cent all other industries including transport, mining, agriculture, media, accommodation, finance (non-bank), and electricity.

The latest survey also found that word-of-mouth referrals were preferred by 35 per cent of small businesses while 5 per cent were swayed by their existing transaction banking relationships and only 3 per cent nominated reputation as a relevant factor.

More than 85 per cent of small businesses said they were now shopping around to find the most suitable lender for the situation, up from 77 per cent in March 2020.

Craig Michie, ScotPac group executive, client acquisition and asset finance, said the findings were a good reflection of the priorities for most Australian SMEs and the increasingly competitive nature of business finance.

“Most SME owners and operators want to focus their time and energy on running their business, not producing copious spreadsheets for prospective finance partners,” Mr Michie said.