Small and medium sized enterprises are paying over 2% more for finance than homeowners and big business. The banks are justifying the difference in terms of their cost of funds and risk premiums. According to an article in today’s SMH, the executive director of the Council of Small Business of Australia, Peter Strong, said business customers were a soft touch.
”It is an easy target and there’s not many people there to defend us.”
Small businesses should increasingly look to use brokers to organise their financing rather than going directly to banks, he said. This would bring more competitive tension to the market.