UPFRONT
NEWS ANALYSIS
Promise of recovery, but SMEs cautious All signs point to a strong economic recovery, but many SME owners are still cautious. Despite that, there is a great opportunity for mortgage brokers to help small businesses source finance THE AUSTRALIAN ECONOMY might be recovering and consumer sentiment improving, but experts fear that small businesses will remain cautious. With the delay in the rollout of vaccinations, business owners may wait and see whether more lockdowns and snap border closures will occur, says business credit score company CreditorWatch. Despite that concern, the group’s Business Risk Review showed that credit enquiries were at their highest in 18 months. As this is an indication that business conditions are normalising, why is there an expectation that demand for finance will reduce? CreditorWatch chief economist Harley Dale says there is considerable uncertainty about how the next few months will pan out, particularly with the COVID-19 vaccination delays in Australia and subsequent delays in the opening of international borders. “That situation is naturally going to cause a bit of angst and uncertainty to businesses, and so it might delay their demand for finance just while they sit back and assess how things evolve over the next few months,” Dale said. Overall, the recovery of the Australian economy looks promising. The NAB Monthly Business Survey released in April showed that business conditions were at a record high in March. Business confidence dropped
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compared to February but remained at an above-average level. “Businesses are telling us activity continues to increase at a very healthy rate as we have moved past the rebound phase in activity with the earlier removal of pandemic-related restrictions. Overall, the recovery over the last year has been much more rapid than anyone could have forecast,” said NAB’s group chief economist Alan Oster. “Despite the dip in confidence [in March], it remains well above its long-run average. This in
also writing commercial loans. Year-on-year there was a 24% increase, possibly in response to COVID-19. Looking at the current market and its opportunities, Dale said a strong economic recovery was on the cards, and therefore it was
“It’s about having a deep dive into where the opportunities lie, because there are sectors which are still struggling and probably will do for some time” Harley Dale, CreditorWatch combination with a very strong read for forward orders points to ongoing strength in activity, which hopefully sees conditions remain elevated, even as we pass through the end of the JobKeeper program.” Figures released in the MFAA’s 11th Industry Intelligence Service report show that a record-high number of mortgage brokers are
a good time for mortgage brokers to consider offering commercial finance. “The data continues to reinforce that the economy is recovering. So in terms of mortgage brokers, that sends a signal that businesses are getting back on track, and what they’re reopening for is probably relatively normal commercial business operations [compared
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