SMALL business appears likely to become a major battleground with at least three lenders planning major moves on the sector.
Both BankWest and the Commonwealth Bank are preparing for the April launch of their products targeting the small to medium-sized and non-bank lender. RESI Mortgage Corporation is reporting a 36 per cent growth of its small business loan book over the past six months.
BankWest managing director Terry Budge said the bank had run pilot programs on its new SME products and conversion rates “were getting better all the time”.
“We’re offering fee-free banking under certain circumstances and are targeting secured lending through mortgages or commercial property.”
The banks’ push towards small business lending was driven by market research that found 74 per cent of SMEs were not happy with their primary financial institution.
Of those dissatisfied SME borrowers, 67 per cent did not appear to find a satisfactory alternative.
The Commonwealth is offering a new package to its Commercial (Small) Business customers.
A spokeswoman for the bank said its package would offer customers “more choice and flexibility so that they can customise their banking according to their specific needs and requirements”.
RESI joint managing director Peter James said small business borrowers were starting to wake up to the fact that there were benefits for the taking.
“In recent years, we’ve seen a steady increase in the numbers of small business borrowers and now it appears to be gathering momentum,” Mr James said.
Small business is a ripe target for lenders that are looking to grow their non-home loan business.
Several surveys show small business confidence is high and many predict an upsurge in the economic outlook.
