Judo Bank: The bank that backs small business growth

Small and medium enterprises (SMEs) are essential to the Australian economy, contributing about a third of industry valued added*, but a survey released by Judo Bank revealed that a lack of business lending support from major banks remains a significant barrier to growth in this sector.

According to Judo Bank’s SME Banking Insights 2021 report, nearly half of the nation’s SMEs sought to grow their business in the six months to September 2021, despite the upheaval and uncertainty they encountered during the pandemic. 

However, of those businesses that applied for funding, only half were fully successful. One in five received just some of the funds they requested, and more than a quarter were rejected altogether. 

The smaller the business, the less likely it was to receive funds, with twice as many A$1 million-A$10 million-sized enterprises denied loans compared to those in the A$10 million-A$50 million bracket.

Exacerbating the issue, businesses faced long wait times throughout the loan application process, even when their requests were approved. 

The report found that lenders took 42 days, on average, to discharge SMEs’ existing loans when they changed lenders and 23 days to approve or reject an application. Such delays no doubt placed enormous pressure on businesses, denying them expedited access to funding at a time when they needed it most.

It is not just individual businesses that suffer the effects of underfunding. 

Of the SMEs that applied for loans last year, a quarter did so to hire new staff; those that were rejected were unable to hire three additional full-time workers, on average – stagnating their own expansion, but also driving down employment levels in the broader economy. 

A personalised lending solution for SMEs

As Australia’s only challenger bank purpose-built for SMEs, Judo Bank has designed its business lending services to ensure businesses can secure funding as and when they need it, regardless of their size.

Judo Bank operates a relationship-led model, recognising that every SME business faces a unique set of challenges. 

Its relationship bankers work one-on-one with customers, getting to know them and genuinely understanding their business, so that they can deliver the expertise and support required to help them scale and grow. 

By taking this holistic view of each customer, Judo’s relationship bankers are able to make judgement-based decisions by gaining a fuller picture of a business’s people, ideas and plans. 

Launched in 2016, Judo Bank is a somewhat recent addition to the SME business lending sector, which means that it is purpose built, with the latest technology and systems to process loan applications, without being encumbered by legacy systems. 

Its lending platform provides an enhanced customer experience, enabling applications to be turned around quickly and efficiently, in line with SME expectations and needs. 

With so many business owners frustrated by the complex and laborious application practices linked to traditional lenders, Judo Bank strives to offer a streamlined and flexible experience.

Such a proposition has never been more important, or desired. As Australian SME businesses continue to focus on expansion and investment opportunities post-pandemic, it is critical that these organisations can access funds to facilitate growth – not only for their own benefit, but also for that of the broader economy.

To find out more about business lending for SMEs, visit www.judo.bank

* Source: Small business sector contribution to the Australian economy