A new survey has revealed a high level of dissatisfaction with banks and other lending institutions as the majority of small business operators miss out on recent interest rate cuts.
The announcement is below:
A recent survey by the Small Business Development Corporation (SBDC) reveals high dissatisfaction levels amongst small business operators over the lending practices of banks and other lending institutions.
SBDC Acting Managing Director, Ms Juliet Gisbourne, says the Ready Response Network survey, conducted during May and June 2009, shows that accessing finance, and unfair interest rates are key problem areas for many small business owners.
"With 47 per cent of respondents indicating they rely on some form of credit facility such as overdrafts or business loans, to operate their business, this represents a significant client group for banks," Ms Gisbourne said.
Concerns raised by respondents to the Ready Response survey include:
- 74 per cent indicated their lending institution required security such as personal assets or real estate before approving business loans,
- 39 per cent of business operators have had no interest rate decreases passed on in the past six months,
- A further 50 per cent of respondents had received some but not all of the interest rate decreases, and
- Only 11 per cent had received the full interest rate cuts of between 2 and 3 per cent.
Comments received from respondents covered several key issues such as the lack of understanding by banks of rural and regional businesses, excessively high fees, and unrealistic cashflow expectations for new businesses.
Ms Gisbourne says the Ready Response Network provides a snapshot of the issues concerning small and medium sized enterprises.
"The results of our latest poll are a litmus test on what is affecting the small business sector in Western Australia," Ms Gisbourne said.
"These results indicate that more is needed from banks to allow small businesses to get on with their business."
