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Industry figure and Firstpoint director Troy Phillips earmarked the business lending space as a potentially lucrative area for lenders as this market segment continues to decline. According to Mr Phillips, lending to SMEs is currently “dead as a doornail”.
Mr Phillips’ comments follow the regional banks' attack on the majors in a collective submission to the Murray Inquiry, calling out the Australian banking system’s current bias towards housing lending.
In a separate submission, the federal minister for small business questioned higher rates for small business loans compared to larger business loans and mortgages.
“According to the Reserve Bank of Australia, the average rate on outstanding small business credit is 215 basis points higher than for larger businesses, and 80 basis points above standard home loans rates,” he said
Asked if he believed business lending was being neglected by the banks, the minister told Mortgage Business there are many areas of interest to the small business community when it comes to the lending practices of the banks and access to finance.
“I have put forward a number of these concerns to the Financial Systems Inquiry for examination,” he said.
“We look forward to receiving the Murray Inquiry’s examination of these areas of interest in the context of the wider financial system.”
Mr Phillips sees a big opportunity for lenders to capitalise on a sector that is hungry for capital.
“The banks neglect the SMEs,” he said.
“I think they have got to have a look at that lending space because someone is going to come in and take it all.”