The world continues to struggle with the COVID-19 epidemic, with some countries suffering more than others. As Australia is one of the fastest-growing countries in the world, entrepreneurs around the world are paying particular attention to recent changes.

Q2 2021 Fence Fund Letters, Conferences and more

Will Australian companies be able to move on to new endless locks soon? Will Banks and Financial Institutions Continue to Extend Australia’s Small Business Loans in Economic Crisis?

Within a few weeks of the new lock, we have some insights that should give hope to the concerned entrepreneurs.

The Australian lock is a problem for small businesses

Australian Canberra is the latest to enter a tight lock. The capital lock means 400,000 people are confined to their homes except for important reasons. Canberra joins other major economic centers, such as Sydney and Melbourne, which have recently announced their own locks.

Melbourne is, of course, Australia’s second-largest city and announced its sixth lock in early August. Many who are struggling in small businesses in Melbourne and the surrounding area may decide to close their doors.

Unfortunately, existing government subsidy programs require small businesses to have 70% of their income in order to receive financial support. As every entrepreneur knows, even a 10% reduction in income is problematic. As a result, companies that suffer from the disease have halved their income and remain in the dark.

According to Chriscy Mauss, a small business advocate and general manager of Chapel Avenue, small businesses on Signal Retail are “walking zombies.” She said there was no “compassion, support and care” from the government.

Even if a business can get support, it may not be enough. In the years to come, prospective companies should clearly receive funding from outside the government.

Are Australians easily accessible for small business loans?

Now more than ever, small businesses struggling to cope with any recent turmoil are turning to financial institutions, hoping for a lifeline.

But is it easy for entrepreneurs in Australia to get a small business loan? Are Australian lenders eager to raise money in this uncertain environment?

Taulia is a US-based financial technology provider of business capital management solutions for Australian businesses of all sizes. In early August, the company said in a research report that Australian small businesses were struggling to find affordable finance.

Taulia found that small businesses often have to meet interest rates of more than 10% more than large businesses can borrow.

On the other hand, Prospa Group, a financial technology technology lender for small businesses, has shown more confidence and courage. In the fourth quarter of the company’s budget (completed June 2021), Prospa reported impressive metrics, including the following.

  • 51% increase over $ 182.1 million in loans.

  • Maximum quarterly origin.

  • Frequent and returning customers make up about half of all origins.

Commenting on the report, Prospa CEO Greg Moshall

While we are all well aware of the current challenges facing small businesses in the Greater Sydney Metropolitan Region, Victoria and South Australia, the SME sector as a whole has been on a strong recovery path over the past fiscal year. According to a survey conducted by RFi Consulting in May 2021, one in four small and micro enterprises expects the FY21 year to increase. This compares with only the 7% that you expect to temporarily reduce.

Prospa is a public company and needs to update the investment community with such information. Unfortunately, private companies do not meet the same standards, and Prosepa’s optimism is uncertain if it is shared in Australia’s small business community.

Entrepreneurs are better prepared

More than a year after the outbreak, motivated entrepreneurs are better equipped to withstand any downturn compared to 2020. Many businesses have succeeded in following an online model or in introducing other necessary changes to adapt to difficult times.

There is some information that indicates that small business operators are fighting. According to the Australian Banking Association, between July 8 and the first week of August, only 600 business loans were repaid across the country. This is a small fraction of the 225,000 Australian business loans made during the same period a year ago.

Credit Wat CEO Patrick Coglan was quoted as saying.

“Businesses have also learned a lot in 12 to 18 months about planning and planning for the future. There has been a huge shift to online, automation and digital … Businesses are leaning.

To be fair, this statement does not apply to all businesses. Some entrepreneurs find it easier to adapt to certain products by default. Many others, especially those who survive tourism and events, will never get used to it.

Fortunately, Australian small business lenders are willing to lend capital, so entrepreneurs have the opportunity to work in the coming years and decades.

The bottom line is that entrepreneurs find a way to grow

Entrepreneurs are among the strongest groups in the world and always find a way to prosper. There is no doubt that the plague was one of the few that any business leader could have imagined. But he has been in the crisis for more than a year and has learned how to adapt and improve the business community.

Fortunately, small business loans in Australia remain open to those who want to compete. They are the ones who will overcome the short-term challenges and become tomorrow’s business leaders.