Q1: In NAB’s recent SME Business Survey, we saw a mix of cautious optimism and ongoing challenges for small to medium enterprises (SMEs) in Australia. Could you expand on the current outlook for SMEs and where you see opportunities for commercial brokers to provide support?

John Shillington: There are clear signs of resilience and opportunity among Australian SMEs, with many businesses taking proactive steps to grow, adapt, and thrive. NAB’s recent SME Business Insights report highlights that while challenges persist, SMEs are increasingly focused on cost reduction, revenue generation, and long-term investment—particularly in technology and operational efficiency.

Confidence is gradually improving, with our survey for Q4 2024 showing a lift in business sentiment, even if it remains slightly in negative territory. This reflects a steady and cautious optimism across small business sectors.

By region, expectations for profitability and revenue are strongest in South Australia and weakest in Victoria, while concerns around business costs and red tape are lowest in Queensland and highest in New South Wales.

From an industry perspective, businesses in the construction sector are showing strong intent to increase staffing, and finance sector businesses are leading in planned investment in AI—both signs of forward momentum and innovation.

For brokers, this evolving landscape presents a powerful opportunity to support business customers. By providing tailored financing solutions and strategic advice, brokers can help SMEs navigate challenges and unlock growth—whether through refinancing, expansion, or investing in new technologies.

Q2: With so many options available for SME financing, how can brokers help business owners choose the right structure for their financing needs? What advice would you give to ensure the loan supports long-term business goals?

John Shillington:

Choosing the right financing structure is critical for any business, and brokers play a key role in guiding customers through this decision. Achieving a great outcome starts with a deep understanding of the business—its goals, challenges, and growth plans.

Brokers should encourage customers to consider several key factors:

1. Industry and business type: Cash flow and capital needs vary widely between sectors. For example, construction businesses typically require different financing solutions than those in retail or tech sectors.
2. Business tenure: How long a business has been in operation can influence the loan type and structure. Newer businesses may benefit from more flexible arrangements, while established businesses might secure longer-term options.
3. Assets and loan purpose: Whether financing equipment, property, or working capital, the nature and size of the asset will help determine the most suitable loan structure.
4. Cash flow requirements: Businesses should assess whether they need a lump sum or ongoing access to funds, and choose a repayment plan that aligns with their cash flow cycles.

Importantly, brokers should also consider scalability. The financing solution should evolve with the business, supporting future expansion, investment in technology, or workforce growth. Products like NAB’s Business Options Loan offer this flexibility, allowing brokers to structure solutions that meet both immediate needs and long-term goals.

By thinking strategically and tailoring each solution, brokers can help their customers build financial structures that not only solve short-term challenges but also set them up for sustainable success.

Q3: How can NAB’s Business Options Loan help brokers better support their SME customers?

John Shillington:

NAB’s Business Options Loan (BOL) is a highly flexible lending solution that gives brokers the tools to support SME clients across a wide range of needs—from purchasing an existing business to funding growth, refinancing, or investing in new technology.

The BOL offers terms of up to 30 years and comes with both secured and unsecured options, allowing brokers to tailor the structure to suit each client. It also provides flexible repayment options—whether principal and interest, interest-only, or a combination of both—with the added ability to make extra repayments and access redraws. This flexibility is particularly valuable for businesses managing seasonal or fluctuating cash flow.

To make the process even smoother for both brokers and clients, NAB provides Fast Track Secured Lending – a simplified business lending application process which delivers reduced financial information requirements for customers. It provides specific lending criteria which allow for simpler decision-making, a better customer experience and quicker turnaround times for brokers/customers.

If you would like to find out more, reach out to your NAB Commercial Broker BDM.

Q4: What are some common mistakes brokers make when guiding customers through the loan process, and how can they avoid them?

John Shillington: A common mistake brokers make is not fully understanding the business’s needs before recommending a loan. It’s essential to dig deeper—whether the loan is for expansion, cash flow, or new technology—so the product matches the client’s financial situation.

Brokers sometimes miss the chance to offer a holistic solution by focusing only on business loans. By considering both business and personal financing needs together, brokers can deliver more value. For example, combining a BOL with a home loan streamlines the approval process and reduces documentation requirements, while offering customers a comprehensive solution. This can help customers leverage home equity for business expansion while securing a favourable rate for their home loan.

To avoid these mistakes, brokers should involve NAB’s Commercial Broker BDMs early in the process. These specialists can provide valuable insights, helping brokers select the right products that align with both the business’s and client’s long-term goals.