SME borrowing insights from Moneytech and Valiant Finance
Accessing finance is getting harder for Australian small and medium enterprises (SMEs), as banks tighten credit policies and approvals take longer. According to Moneytech’s Group Head of Sales & Distribution, Reece Ketu, the key to unlocking funding isn’t just where businesses apply, but how they approach the process.
Ketu said clarity and preparation are the two biggest factors that determine whether a loan is approved. “The first step for any SME should be defining exactly what the funds are for and how they will be repaid,” he stated. “When the purpose is clear, whether it’s covering seasonal cash flow, financing equipment, or bringing forward payment on invoices, it becomes much easier to identify the right structure. Lenders want to see that the finance is supporting, not straining, the business.”
While public discussion about SME finance often focuses on surface-level advice, Ketu stressed that the reality is more complex. “We often hear very general tips like ‘improve your credit score’ or ‘trade for two years,’ but SMEs need clearer guidance,” he said. “In practice, lenders look at dozens of metrics – from business plans to property ownership – and the process varies depending on whether you’re seeking a business loan, vehicle finance, or a larger or complex facility. Too often, small businesses aren’t always made aware of what’s required, which is why clear guidance is so important.”
Ketu noted that one of the most common mistakes SMEs make is focusing only on the loan amount or the interest rate, rather than the loan structure and repayment. “The cheapest loan is the one you can service in a soft quarter. Chasing the biggest facility or lowest rate without considering cash flow can create problems down the track,” he said.
He stressed that preparation also makes a major difference. Traditional lenders, expect up-to-date financials, bank records, BAS lodgements and evidence of tax compliance. Non-bank lenders will offer more flexibility, but businesses that have these in order will always have an easier pathway to approval. Businesses that are open about challenges and can demonstrate how they are managing them, are often better placed than those that try to present an unrealistically smooth picture.
For SMEs, this means treating a loan application much like a business plan: ensure financial records are current and reconciled, be transparent about any tax obligations or payment arrangements, and match the type of finance to the purpose – short-term cash flow should be funded differently to long-term asset purchases. Demonstrating a clear repayment pathway, supported by realistic forecasts, gives lenders confidence that the facility will strengthen rather than strain the business.
That perspective is echoed by Alex Molloy, Co-founder and CEO of Valiant Finance, which receives thousands of loan requests each month. Molloy said many delays and rejections come down to incomplete or “unfinanceable” applications.
“Missing BAS statements, tax debts without payment plans, or unclear bank records are red flags for lenders. The businesses that get approved faster are the ones that are financially fit,” Molloy said.
He added that the right fit between business and lender is just as important as preparation. “Credit policy, not just price, drives approvals. We see strong businesses knocked back simply because they applied to the wrong lender. We really focus on connecting businesses with the right lenders who understand their industry and profile.”
Molloy explained that businesses can strengthen their applications building a verifiable trading history early through ABN and GST registration, and by staying on top of ATO obligations, particularly now that interest on tax debt is no longer deductible. Keeping personal and business finances separate also helps present a clean picture, while ownership of property or assets can improve loan terms – though he noted that strong financials alone can still open doors to unsecured solutions.
“Ultimately, lenders want to see that a facility will strengthen, not strain the business. SMEs that can demonstrate this, can cut the approval process from weeks to hours,” Molloy said.
Ketu agreed, adding that the businesses most likely to succeed are those that borrow with intent, not urgency. “The businesses that do best know exactly what the money is for, they’ve tested how repayments fit into their cash flow, and they build in flexibility to adapt when the market moves,” he said.
The message for SMEs is clear: finance is available, but it requires a strategic approach. By being clear on purpose, preparing financials, and targeting lenders whose policies fit their business, SMEs can put themselves in a stronger position to access the facilities they need to grow.