"Our adviser channels are bringing upwards of 40% of new and return business into Prospa, and we’re returning a 69% approval rate on these applications currently.”
The results of a six-monthly survey from RFI and the SME Banking Council, commissioned by Prospa, show that short-term business confidence has reached its highest level since before the pandemic.
More than half (53%) of small business owners reported feeling confident about the future of their business over the next 12 months, which is the highest figure since the 57% recorded in November 2019.
Whilst some concerns have declined among small business owners, including attracting and retaining good staff, financing growth, time and resource management and the impacts of COVID-19, some challenges have been felt more acutely.
Challenges such as labour costs, navigating the increasing cash rate, reduced business demand and weak cash flow are expected to worsen over the coming year, according to the report.
Planning ahead, a growing proportion of SMEs intend to turn to professionals for advice about their business finances to help them overcome these challenges. When you consider roughly 65% of SMEs surveyed intend to apply for funding in the next six months, there’s a huge opportunity for advisers to be prepared by diversifying into SME lending right now.
Prospa NZ Managing Director, Adrienne Begbie echoes this sentiment, summarising the importance of advisers for Prospa: "Our adviser channels are bringing upwards of 40% of new and return business into Prospa, and we’re returning a 69% approval rate on these applications currently.”
"Now is the perfect time for brokers to educate their small business clients about the benefits of alternative lenders and bust any myths that may be preventing them from considering its services.”
So where do the opportunities lie and what can advisers do to capitalise on them?
NZ SMEs aren’t taking advantage of alternative lenders as much as they could.
In fact, despite the fact that two out of three SMEs are aware of alternative lenders, only one in three would consider applying for a loan with one. Interestingly, of those that did choose an alternative lender, 24% said it was because of the quality of the advice and service they received.
Of the SMEs that would not consider approaching an alternative lender, the main reason was due to a lack of awareness - they simply had not thought about it (27%).
Begbie points to this huge opportunity for advisers to diversify into small business lending, saying, "now is the perfect time for brokers to educate their small business clients about the benefits of alternative lenders and bust any myths that may be preventing them from considering its services”.
Be prepared for the upswing in demand for SME funding. Start your journey by partnering with Prospa to offer hassle-free access to business finance to existing and new clients – and help them make business happen.
References:
RFI Global New Zealand SME Banking Council, May 2023
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