Lending to small business in Australia: a note

This paper investigates the perceptions of loan officers towards small businesses. It was designed to determine the problems faced by officers in dealing with small business borrowers and to determine the extent to which these problems influence the officer’s decisionmaking process. This study, though confined to one major bank and involving 33 loan officers, gives insight not only to small businesses but to government agencies whose main objective is to provide assistance to small businesses. Problems that arose as a result of insufficient knowledge in business management appear to be the major difficulty faced by the loan officers when dealing with small business borrowers. This factor seems to have a significant impact on the officer’s decision-making process. Metropolitan and big town officers appear to be more receptive to small business customers as compared to their counterparts in small towns and rural areas. The majority of the officers in small towns and rural areas believe that their small business customers will remain small indefinitely.