Major banks move to speed up business lending

Major banks Commonwealth Bank of Australia (CBA) and ANZ have recently announced moves to speed up lending processes for businesses and commercial finance.

Announced on 4 December 2023, CBA unveiled “new enhancements” to its business lending process to allow eligible small-business customers to receive instantaneous conditional decisions for cars, utility vehicles, and vans.

CBA confirmed that under the new process, eligible existing business customers who already have a qualifying credit facility with the major bank will be able to fund new vehicles from suitable suppliers through the lending system BizExpress.

According to CBA, this cuts down the time to decision from “three days to instant”.

This functionality will be made available to customers who apply with a banker initially, with plans for a revised instant online decisioning pathway expected to go live in the next financial year.

The major bank stated that the changes coincided with industry data (East and Partners, October 2023) that revealed that 65 per cent of customers reported that they were twice as likely to change lenders based on the speed of funding rather than actual price.

CBA general manager asset finance Chris Moldrich said that a market share of 17.4 per cent and business lending at $2.2 billion in funding during 1Q FY24 alone was a key priority for the major bank and asset finance was crucial to that strategy.

“These changes will help our customers grow their business with faster decisions and access to funds, increasing productivity and scale as well as providing better customer experiences,” Mr Moldrich said.

Meanwhile, ANZ has announced changes to its Commercial Streamlined Lending process for its commercial brokers, which allows clients to apply for secured lending of less than $1.5 million with just one business activity statement (BAS) and an integrated client account statement.

According to ANZ, this can lead to faster approvals of up to two days.

For lending under $1.5 million, ANZ stated it has “simplified” lending criteria to allow clients to invest in commercial property easier with a loan-to-value ratio (LVR) of up to 65 per cent on standard commercial property security.

Prior to these announcements, NAB revealed during the release of its 2023 full-year results for the 12 months to September 2023 that the major bank would pursue “greater opportunities for growth” in its business banking arm.

NAB chief executive Ross McEwan said at the time that its financial year 2023 performance had “supported another year of strong growth” in its SME franchise, with business and private banking having increased lending by 8 per cent to $143.3 million. This included a 24 per cent growth in small-business lending.

The business arm also grew deposits by 8 per cent to $206.1 million, underpinning a 22 per cent rise in underlying profit for the division, to $5.31 billion in FY23.

[RELATED: ‘Greater opportunities for growth’ in business bank: NAB]