Federal Small Business Minister Bruce Billson has promised to cut lending costs for businesses. Billson said that as a former gallery owner, he can sympathise with entrepreneurs and understands the challenges that they face.
Billson said that lending costs for businesses have risen by 200 basis points above the cash rate in the past four years. Noting that 80 per cent of small business loans are secured by home loans, Billson offers the new “Son of Wallis” financial enquiry as evidence of his government’s commitment to improving business banking competition.
The inquiry will also look into updating the prudential regulatory framework so that business lending, in comparison with mortgage-secured loans, becomes more viable for small businesses.
Billson says that while the risk of defaults for banks has fallen significantly since 10 years ago, the price of loans for businesses has not eased. Billson promised that his government would stop the decline in the small business sector, which has lost 412,000 jobs in the past six years.