SME lending and financing

It’s hard to overstate how important money is for the continued operation, growth and success of small and medium-sized enterprises (SMEs). Access to the support of various financial institutions, including the UnLock Payment Gateway, is indispensable for SMEs as they emerge and expand.

According to a report from the Organisation for Economic Cooperation and Development (OECD), an analysis of information relayed by the Reserve Bank of Australia and other available data indicated that SMEs in the country are having trouble accessing financial support through banks. Without sufficient collateral, businesses in the early stages of development and those that were growing faced particular challenges.

So what are SME loans, what does it take for businesses to secure them and what other financial resources are available to SMEs?

What is an SME business loan?

An SME business loan is a method of borrowing designed to help small businesses acquire the working capital they need in order to invest in their operations, purchase new equipment, buy additional stock and set themselves up to generate a profit. The amount borrowed and the terms of the loan can vary based on the intention of the loan, the borrower’s creditworthiness and the terms set by eligible lenders.

According to, a free government resource for Australian businesses, in addition to business loans, lending to SMEs can entail the administration of several other financial products, including:

  • Overdraft facilities.
  • Lines of credit.
  • Commercial bills.
  • Invoice financing.
  • Debtor financing. 
  • Supply Chain funding.

SME business lending can take many different forms based on the needs of the business owner and their ability to demonstrate to financial institutions that they can be trusted to uphold the terms of the arrangement.

SME business owners should also be aware that different business lending may, or, may not require personal property as security for the loan. Business owners should do their homework across the different forms of lending to ensure that they are not accepting terms from the first offer they receive, especially where property is concerned.    

Institutional investors can provide another form of financial support for burgeoning businesses under the right circumstances. However, it should be noted that many SMEs, especially newer ones, find it difficult to attract significant outside investment. 

What are the documents required for an SME loan?

Business owners may be required to submit different documents depending on the terms and conditions they negotiate with their lender.

In general, according to, SME lending may require the applicant to submit paperwork like:

  • Proper identification.
  • A comprehensive business plan.
  • Financial information, like past reports and future forecasts.

Check with your financial institution to determine what exactly they’ll require and compile it into a thorough, easy-to-read report.

An introduction to your accountant can be worthwhile here to save you time and effort gathering the information required. Some other pieces of information which will more than likely be required are credit check and recent BAS.  Ask questions early to avoid delays during the process.

What SME schemes are available?

To boost business finances for SMEs, government schemes can periodically provide additional support to help small businesses grow their working capital and ease cash flow concerns.

Throughout much of 2020, the Coronavirus SME Guarantee Scheme will help bolster SME lending by supporting loans from lenders that back small businesses.

When should I apply for SME financing?

The best time to apply for a business loan or other lending services is before you need them. You don’t want to wait until your cash flow has dried up to seek help. Make careful forecasts and closely monitor the business’s performance against your predictions in order to anticipate shortfalls ahead of time and apply for financing proactively.

Which bank is best for SMEs?

Banks are regulated by the Australian Prudential Regulation Authority (APRA). Oversight from the APRA can make them an attractive option. However, as we mentioned, it can be difficult for SMEs to secure loans from bank lenders if they don’t have the proper collateral. Financially responsible nonbank lenders and lending institutions can help fill the gap here by providing the support that SMEs need in order to acquire working capital, increase cash flow and keep growing. Look for ethical lenders that loan money on terms that are reasonable.

The UnLock Payment Gateway can provide a simple financial service to help SMEs improve cash flow, allowing their operations to continue running smoothly and enabling profit expansion. For a low monthly merchant fee, our SME users can purchase additional stock from suppliers while expanding their payment terms up to 90 days, allowing them to take the time they need to generate additional profit, take advantage of merchant discounts and grow the business.

We believe in helping SMEs improve their cash flow to reach the opportunities in front of them. To find out more, visit the UnLock website, email our support staff at or call 1300 257 387.