The Finance Brokers Association of Australia (FBAA) says Australia’s small to medium enterprises (SMEs) are becoming increasingly frustrated with the big banks, and has issued a call for finance and mortgage brokers to take more of a market that contributes over $400 billion annually to the nation’s economy.

FBAA managing director Peter White AM said many brokers were already undertaking independent professional education to help them better understand business accounting practices in order to meet this widening gap in the finance market.

“The big banks have lost touch with small to medium business customers. These clients require flexibility and support, but instead they are being assessed with rigid credit guidelines and offered bank products that don’t meet their needs,” he said.

He pointed to a recent report by East and Partners that was commissioned by challenger bank Judo Bank, which found that 12 per cent of SMEs had no interaction with their bank in 2020 yet believe they needed more engagement.

The report also found that of the businesses that had any sort of interaction with their bank, only 15 per cent rated it high quality, with a whopping 54 per cent saying their interaction was low frequency and low quality.

“These figures confirm that there is a huge market being taken for granted by the big banks, which finance brokers can tap into through offering superior service and knowledge, just as we have with consumers.

“The Government’s current decisions around responsible lending ensure easier access to credit by SMEs, many of whom brokers already deal with through home mortgages.”

Mr White explained that small business people often use their homes for security when taking a business loan, and they have traditionally been more likely to default to the institution they bank with.

“This will change, because many business owners are not aware of the significant increase in fintech and non-bank lenders, something that finance brokers can help them with.” He said the FBAA will continue to talk to new small business ombudsman Bruce Billson to explore ways for brokers to better assist SMEs.