Banking fact sheets to help small business

Date issued: 15 June 2009

The Australian Bankers' Association (ABA) and CPA Australia have partnered to provide small businesses with information on applying for loans and how to deal with debt.

The information outlined in two detailed fact sheets was sought by representatives from small business organisations following a roundtable earlier this year, organised by the Federal Government which featured banks, small business organisations as well as other business and industry groups.

The two fact sheets are:

• Applying for a loan (completed jointly with CPA Australia)
  One of the key challenges for many small to medium businesses is working out how to approach the bank for a loan. Small businesses often look to finance their business needs with debt. This fact sheet will discuss how small to medium businesses can prepare for the bank finance application process.

• Dealing with debt — how banks can help if the small business is experiencing financial difficulties
  Recent changes in the financial environment and the domestic economy have affected many bank customers including small business customers. If you do encounter problems, it is best to get in touch with your bank as quickly as possible and together work out a strategy for keeping on top of your loan.

In March this year in Melbourne, the ABA, member banks and small business representative organisations attended a small business roundtable hosted by the minister for small business, independent contractors and the service economy, Dr Craig Emerson, to discuss issues associated with the provision of finance to small business against the background of the global financial crisis.

At this meeting, the ABA and banks assured small business organisations that banks were still lending to viable businesses, despite the volatile costs of funds which banks were facing in wholesale markets.

David Bell, chief executive of the ABA, said: 'We listened to the concerns of small businesses and heard that they wanted some detailed information on how to apply for a loan and also how banks would assist customers in financial difficulties.'

'We also worked closely with CPA Australia which lent its expertise to the development of the 'Applying for a Loan' fact sheet. This recognises the special role accountants play in advising small business people on many aspects of their finances.'

CPA Australia general manager policy and research Paul Drum said the fact sheets were a necessary response to the prevailing economic circumstances.

'In the current economic circumstances it is more important than ever for small businesses to have a good relationship with their banks and to have a clear understanding of their financing options. These fact sheets outline key measures toward achieving this,' he said.

'This is a positive outcome and demonstrates an appreciation of the small business sector's crucial role as an economic driver. The ABA is to be commended for this initiative.'

The ABA will contact small business organisations so they can inform their memberships that the fact sheets are available.