Liberty helps the tough get going

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Australian SMEs are the lifeblood of the economy, and with Liberty they have a flexible backer that’s willing to listen and quick to respond

EXITING THE pandemic hasn’t been the bed of roses many small businesses dreamed of in the depths of lockdown not so very long ago. The rebuild is proving slow and is beset with macro issues like global inflation – which means having a supportive lender that understands that business is a marathon, not a sprint, is important. A simple example of how the pandemic continues to reverberate among SMEs is the challenge of providing the required paperwork.

As a leading Australian non-bank lender, Liberty offers innovative solutions at competitive prices to support customers with greater choice. Over the past 25 years, this free-thinking approach to loan solutions has seen more than 600,000 customers get finance across a wide range of home, car, personal and business loans, as well as SMSF lending and insurance products. Liberty remains the only non-bank lender with an investment-grade credit rating offering custom and prime solutions to help more people get finance.

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John Mohnacheff, Liberty

“After a few years of interrupted trading, both new and established small businesses may not have the track record or documentation typically required for a traditional business loan,” says Liberty group sales manager John Mohnacheff. Liberty is a non-bank that is built around a culture of thinking outside the box. So it understands that a small business owner may be anxious that it may not meet the typical criteria found in application forms. “Liberty takes a free-thinking approach to lending, so finding unique solutions to complex situations is what we do best,” says Mohnacheff. “Looking beyond the credit score to understand the full picture helps us support SME borrowers through whatever events occur.” The non-bank has a long history of helping the little guy, and a profound respect for the importance of SMEs to the Australian economy. “With more than two decades of specialist lending experience, Liberty understands the unique needs of business owners, and can offer flexibility many other lenders can’t,” says Mohnacheff. He says it’s the personalisation of Liberty’s solutions that really benefits SME borrowers. “We take the time to assess each application on a case-by-case basis and understand the unique needs of each customer,” he says. “Whether a borrower lacks the typical documentation, has historical credit issues, or simply prefers to do things differently, together with brokers we help customers find the very best product for their circumstances.”

A testing time Many SMEs have their backs to the wall in terms of a rising interest rate environment, consumer confidence and securing staff, to name a few issues. “Persistent labour shortages and supply chain delays have seen many SMEs in need of quick access to cash flow,” says Mohnacheff. Business sentiment surveys show that almost a third of employing businesses are currently having difficulty finding suitable staff. But just because staff are at a premium doesn’t mean that business owners can afford to be slow on their feet when it comes to jumping on the next big thing or stamping out a logistics brushfire. “Many business owners need funds to make the most of opportunities such as discounted inventory,” says Mohnacheff. “Overall, SME borrowers are seeking more flexible, personalised solutions to help them move forward.” But it’s inflation that is the elephant in the room, as more indicators suggest it may become entrenched despite the best efforts of the Reserve Bank of Australia. Businesses are constantly behind the eight ball in terms of underestimating operating expenses, with the latest government survey showing that 44% of businesses now expect these to continue going up.

“As businesses come to terms with rising cost impacts, we expect business owners will be carefully considering the various finance solutions available to them,” says Mohnacheff. “Some SME customers may require a line-of-credit solution while the business picks up speed.” Others may seek to consolidate debts that have accumulated in recent years. “Businesses are working to strengthen their position while also looking to create future success,” says Mohnacheff. “As a result, appetite for credit remains high and the need for business finance is extensive.” Some examples of typical expenditure in the current environment include the cost of business premises and office fitouts, or equipment and technology upgrades. SME customers often require significantly faster access to funds than a typical mortgage customer, something Liberty prioritises. “To help ensure our business partners can provide a smooth customer experience, we take care to deliver fast turnaround times on our SME loan applications.”

The broker role One reason behind Liberty’s ability to maintain its speedy processing is the close relationships it has with brokers. “Brokers have direct communication with our specialised underwriters, BDMs and settlement officers,” says Mohnacheff. “We know this can eliminate hours of legwork for brokers and help us process applications with far greater efficiency.” But the tougher time for SMEs is an ideal chance for brokers to make a real difference to Australian businesses. Businesses will remember a broker who helped them out when things were looking a little dire, and sticks with them when times are good.

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“Looking beyond the credit score to understand the full picture helps us support SME borrowers through whatever events occur”

“SME borrowers are seeking more flexible, personalised solutions to help them move forward”

Australian SMEs are the lifeblood of the economy, and with Liberty they have a flexible backer that’s willing to listen and quick to respond

Source: ABS, Business Conditions and Sentiments, June 2022

Steady increase in business operating expenses – actual and expected

Source: ABS, Private New Capital Expenditure and Expected Expenditure, June 2022

Private new capital expenditure and expected expenditure* – Jun qtr 2022

“While supporting SMEs through challenging times may require a little extra effort from the broker, it also presents an opportunity to build strong customer relationships,” says Mohnacheff. Sometimes business owners can no longer see the wood for the trees when they’re dealing with keeping operations ticking over day in and day out. “SME borrowers need guidance more now than ever before, and we ensure our brokers have the knowledge needed to deliver it,” says Mohnacheff.

“We work closely with our broker partners to help them provide the kind of support customers require in the current economic climate.” It’s all part of the longer-term cyclical nature of markets, which experience ups and downs as a natural and largely inevitable process. “Business requirements change constantly, and being a broker who can help navigate a customer’s changing financial circumstances is a huge advantage.” When the dust settles on the current period of rising costs, SMEs will want to look back and know not only that they made it through the difficult conditions but that they were able to do more than just scrape by. Call it a case of when the going gets tough, the tough get going. “This means greater opportunity for brokers to help customers reach their small business financial goals,” says Mohnacheff.

Australian SMEs are the lifeblood of the economy, and with Liberty they have a flexible backer that’s willing to listen and quick to respond

John Mohnacheff, Liberty

Buildings and structures

$17.2bn

Equipment, plant and machinery

$16.7bn

YoY change: -2.5%

YoY change: 2.1%

$33.9bn

Total new capital expenditure

Feb 22

Mar 22

Apr 22

May 22

Jun 22

Jul 22

26%

23%

35%

31%

34%

44%

36%

40%

42%

43%

46%

Businesses reporting actual increase in operating expenses

Businesses expecting increase in operating expenses

*Seasonally adjusted

YoY change: -0.3%

“SME borrowers are seeking more flexible, personalised solutions to help them move forward”

John Mohnacheff, Liberty

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