Worried Banks, Happy Farmers, Struggling SME’s- Sept 25, 2020

Fiscal Taper?

Whatever that is, the banks are expecting it to be bad, according to The Australian’s (paywall),  business correspondent Richard Gluyas.

He writes that the banks will face their biggest test since 2008 with the downsizing of JobKeeper and the end of the loan deferral period.

The article quotes a range of bank johnnies expressing fear there will be a “tsunami” of loan defaults and an “avalanche” of complaints as business owners fall short of cash and are unable to meet their loan obligations.

There is no need to panic writes the economics editor, Adam Creighton.  Apparently, the banks are in a better place to ride out the insolvencies than ever before.

Bank on the Bush

National Australia Bank advises that equipment loans are up by 81 per cent in South Australia and Northern Territory, 41 pc in Victoria, 37pc in W.A. and 27 pc in NSW-ACT.

It appears to be part of turn around in the agricultural sector according to Andrew Marshall of Farm Weekly  who reports that “strong market fundamentals, long-term business planning and solid banking relationships have held many businesses in good stead, leaving them well positioned to seize opportunities as markets recover and seasonal conditions improve”

Rate Sitter makes Plenti

Plenti, the fintech formerly known as Rate Setter listed on the ASX on Wednesday with a market capitalisation of $280.3m

The company takes money from various sources – including retail investors – and lends it to customers as personal, car or renewable energy loans, reports The Motley Fool.

The company has been around since 2014 and attributes its 60% annual growth rate over the past two years to its proprietary technology.

My Brother’s Keeper

Publicly funded health checks should be available to small businesses to ensure their survival and long term prosperity, writes, Harry Guinness in The Mandarin.  Quoting a report from his own Blueprint Institute,  Guinness argues the health checks would cost up to $3,000 a pop and would be conducted by an accountant, tax agent or bookkeeper giving business owners advice on how to restructure, or if necessary, how to close their doors.

He argues we are already spending a lot of money on business welfare and such health checks would increase the effectiveness of this expense.