NATIONAL: The Australian Retailers Association (ARA) has accused the banking sector of ignorance regarding the needs of small business.
Following a government organised roundtable on SME access to credit during the global financial crisis last week, ARA executive director Richard Evans said Australia's big banks were "disconnected from the small business market after clearly demonstrating they don't believe there is an issue with small business access to credit."
"Clearly small business doesn't appear on the banking sector's economic data radar in any significant way - with banks stating 60 percent of small businesses don't borrow - indicating they are not close enough to the real small business market doing it tough right now," Evans said.
"Small business owners, including mum and dad retailers, do borrow. They take out personal loans and they access second mortgages for their homes for their businesses to survive.
"Most commonly they use their personal credit cards to fund their day-to-day operations such as cash flow and small capital equipment purchases."
Australia's big banks needed to generate new low-rate credit cards and other lending products for small business, he said. They also needed to work with industry associations to generate small business survival strategies and begin to collect data about how small business operated and accessed funds.
"Reductions in credit card interest rates or new low-interest credit card products may also address the current issue of consumer trepidation to inject funds back into the economy via the retail hub."
"For small retailers, the fact remains it is a difficult and costly processes to borrow from banks who are lured by the obvious benefit of other lucrative markets and don't understand the small business sector.