A Brief Summary of Recent Finance Headlines

Slack Bankers | Frustrated SME’s | Fixed Rates Dive | & More

Slack Bankers Drag Feet

The time it takes for a large bank to approve a home loan gets even more ridiculous.

A national survey of Brokers, reports that bank turnaround times increased in December.

Westpac was the slackest taking up to 24 days to reach a loan decision. St George came in second at 21 days.

Compare that with many non-bank lenders who can do the job in 7 days.

Be Kind To Your Boss?

It’s a novel idea for tough times and I suspect trade unions won’t like it.

Two academics from ANU argue that businesses should be able to “borrow” from employees during an economic crisis.

Writing in The Conversation, the authors  propose that rather than laying off staff troubled businesses could “borrow” funds from their employees by asking them to sacrifice a portion of their wages – perhaps up to 10%.

The money would be refunded when (and only if) the employer’s revenue bounced back by an agreed amount in the future.

The authors claim it is a win-win for workers and the enterprises they work in.

Frustrated Customers

Eight our 10 small businesses have nominated loan conditions and the requirement to provide property security as their biggest frustrations when dealing with the main banks.

That said, it’s a fair bet that bankers will ignore the complaint.

If so, non-bank lenders will continue to benefit. The recent SME Growth Index by business finance house, Scotpac reports a surge in the proportion of SME’s planning to use non-banks to fund new business investment this quarter.

This comes after the Reserve Bank found there was little demand for new SME loans despite interest rates declining to historically low levels, reports Accountants Daily.

Lowest Home Loan Rate?

Comparison website, Saver,  believes the NAB-owned UBank has introduced what could be the lowest advertised home loan interest rate In the market

The bank’s three year fixed is 1.75% p.a. with a comparison rate of 2.22% p.a. for owner occupiers on P & I loans.

Resimac Reaching Out

Non-bank lender Resimac is stepping into the asset finance market to broaden its offering to customers.

The boss, Scott McWilliam told Broker News that diversification was a key growth strategy and it’s planned that asset finance will contribute significantly to Resimac’s profits.

SME Survival Plan

The government has passed laws to help small businesses survive an economic downturn.

Calling them “landmark reforms”, small business Ombudsman, Kate Carnell says the legislation is an absolute game-changer for small businesses, particularly those effected by the Covid crisis.

Carnell argues that the reforms will ensure business owners have the option to turn their businesses around instead of finding themselves on an express train to winding up with no control over the process.