However, the biggest hurdle for 60% of those people (5.4 million) is ‘access to money’, according to research commissioned by the Australian Banking Association (ABA).
The percentage is even higher for women and young people. Indeed, two-thirds of women and people aged 18 to 34 believe access to finance is stopping them from fulfilling their entrepreneurial dreams.
It’s fair to say there’s no shortage of entrepreneurial self-promoters plugging their brands on Instagram and LinkedIn these days, which could give you the impression that plenty of people are reaching out for business finance.
But small business loan applications have actually declined by 33% since 2014, according to the ABA report.
That is despite 94% of small business loans being approved by lenders, not to mention record low interest rates.
“There could be many reasons for the downturn, including people believing that they won’t get a loan, thinking it takes too long, deeming the application process is too complex, or they’re simply borrowing money from other sources,” acknowledges ABA CEO Anna Bligh.
Well, besides obtaining access to the initial capital that’ll allow you to become your own boss, business finance can also allow you to grow your business more quickly.
That’s important, because the bigger your business, the better its chance of survival.
For example, while almost two-thirds of businesses in Australia are sole traders, only 60% of sole traders who were operating in June 2014 were still in business by June 2018.
That number increased to 70% for businesses with 1-4 employees, 78% for 5-19 employees, and 82% for 20+ employees.
Meanwhile, the main reasons businesses seek finance are to maintain short-term cash flow or liquidity (40%), to ensure the survival of business (32%) and to replace equipment or machinery (24%).
To help prospective small business owners the ABA has created an educational website, which includes a suite of resources demystifying business financing.
Once you think you’re ready to apply for finance, get in touch. As the ABA points out, one of the key benefits of using a finance broker like us is that we handle the paperwork and assist you every step of the way.
And because we have developed professional relationships with lenders, we may also be able to reduce the processing time for your application.
Last but not least, we can review your current financial position, as well as your business case, to help match your funding needs to finance available in the market.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.