Yesterday, COSBOA participated in a roundtable discussion convened by the Reserve Bank of Australia (RBA) to discuss small business finance. The meeting was held in Sydney and was co-chaired by RBA Governor Philip Lowe, COSBOA Chairman (and ACAPMA CEO) Mark McKenzie and Australian Bankers Association (ABA) Chairman (and ANZ CEO) Shayne Elliott.
In his opening remarks, Mark McKenzie stated that despite some significant improvements in product simplification in recent years, many small business owners continue to encounter substantial difficulties in securing affordable lending products to support the growth of their businesses and/or navigate short term cashflow issues – often forcing them to seek out non-traditional forms of financing and/or put their growth plans on hold.
“Access to affordable business lending products is an essential requirement of the small business ecosystem and Australia’s collective inability to address the current difficulties represents a significant opportunity cost for our country in terms of untapped employment growth in the small business sector”, Mark McKenzie said.
The round table was considered a key event for the business finance sector and was the result of months of collaboration between the RBA, the ABA and COSBOA. Other attendees at the meeting included James Shipton the Chairman of ASIC, Anna Bligh CEO of the ABA, David Gandolfo Deputy Chair of COSBOA (and President of CAFBA), Peter Strong CEO of COSBOA as well as senior representatives from the ASBFEO, the Australian Treasury, senior banking representatives and senior officers from APRA.
Participants in the roundtable heard about the experiences of the business owners of six (6) Australian businesses who outlined recent and significant difficulties in securing capital needed for both start-up and growth.
“The issues highlighted by these business owners pointed to problems with accessing the right finance products, limited knowledge of finance products, and substantial difficulty in navigating the associated red tape”, said COSBOA CEO Peter Strong.
The meeting discussed issues around the processes and communication mechanisms for small business on business lending, as well as he need for the finance sector to develop a deeper understanding small business needs and behaviours.
“The small business sector is as diverse as the 6.5 million Australians who work in it – it is not just ‘a bunch of shops’ – and modern lending products must be developed to take account of this diversity”, said Peter Strong.
“One issue that gained a deal of interest was the opportunity to collect and use better data on small business operations to support banking decisions on loan applications”, Peter Strong added.
Other key messages included a stated desire of small owners to run their business without being told what to do by regulators, government or banks; and a call for access to a range of products that are better tailored to the specific needs of small business owners – most of whom are more than capable of looking after their own interests without being overprotected by onerous lending regulation.
Mark McKenzie concluded that ‘it was very pleasing to see the desire of all participants to build on this round table and advance cooperative activities that deliver benefits to small business owners and the finance community alike.”
RBA Round Table Opening Remarks | COSBOA | Small Business Advocacy | Australia
Left to Right: Mark McKenzie Chair COSBOA & ACAPMA CEO, Shayne Elliott Chairman ABA & CEO ANZ, David Gandolfo President CAFBA & Vice Chair COSBOA, Philip Lowe Governer RBA, Anna Bligh CEO ABA, James Shiptoib Chairman ASIC, Peter Strong CEO COSBOA, Dr Sean Carmody Executive General Manager APRA, Anne Scott ASBFEO