The SME Banking Insights Report for 2019, commissioned by Judo Bank has found that the levels of trust in the banking sector has plummented to just 2.4 points out of 10.
This comes despite huge investments by the industry to improve their image since the release of the Royal Commission findings.
In fact 17 per cent of SMEs surveyed said the major banks were “too far gone” to ever be able to rebuild trust.
It comes in the midst of a worsening credit crisis for SMEs with the research finding the finance gap for businesses with a $20 million turnover has grown from $83 billion to $90 billion over the past twelve months.
The report was conduct by interviewing over 1700 SME owners and managers and contradict claims by the finance industry that SMEs are not applying for credit.
The research by Judo found that a quarter of SMEs approaching banks for credit were turned away despite 46 per cent of respondents saying they wanted to borrow money over the next year.
“It is most definitely not a demand issue as the big banks claim. On the contrary, this report confirms that it is entirely a problem with supply,” said chief financial officer at Judo Chris Bayliss.
Mr Bayliss said the major banks gave up on SMEs long ago and that was reflected in the growing gap highlighted by the report.
“Many SMEs have obviously concluded that the big banks simply have no appetite for their financing requirements.
“And that may explain why SME customers remain deeply skeptical about the major banks – and unhappy with the services on offer.”
Twenty percent of SMEs said with extra funding they would hire more employees with another 25 per cent saying they would provide higher wages and better conditions to staff.
“Small business owners are crying out for financing so that they can use the money to grow their business, employ more workers and pay higher wages – which is exactly what Australia needs right now,” Mr Bayliss said.
