Banks out of touch with small business

The Australian Retailers Association (ARA) has come out firing against the big banks, claiming that they are out of touch with the financial needs of small business.

ARA executive director Richard Evans said that Australia’s big banks are disconnected from the small business market as they don’t believe small businesses have any problems with access to credit.

“Clearly small business doesn’t appear on the banking sector’s economic data radar in any significant way.”

The banks have claimed that 60 percent of small businesses don’t borrow, however Evans believes this is an indication that banks are unaware of how tough small businesses are doing it at the moment.

“Small business owners… do borrow. They take out personal loans and they access second mortgages for their homes for their business to survive.”

In order to help small business, Evans believes that Australia’s big banks need to generate new low- rate credit cards and other lending products for small business, along with working together with industry associations to generate small business survival strategies.

The Rudd Government has taken the first steps to ensure small businesses are getting the financial support they need by providing assistance where banks are unable to.

If a small business owner has had an application for credit refused by a financial institution, they will have a second chance to access credit by appealing to the government.

Evans has praised the government’s initiative in reaching out to small business.

“This Rudd Government Initiative is a very good first step to break down the operational barriers between the small business sector and the banks.”

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