In the May meeting, the Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5 per cent with the last rate move back in August 2016. With a combination of retail deflation and continued weak wages growth still impacting economic growth, the Reserve Bank has signalled that we can expect to see rates stay where they are for the time being. They have indicated however that it expects the next rate move to be an increase and is concerned about the potential shock that this may cause the economy.
Banking Royal Commission
The royal commission will run through the rest of this year. An interim report is due in September, and a final report is due to be released in February 2019. The commission has turned its focus to the SME sector and we have continued to hear more stories of poor lending practices. Please consider how the fallout from the royal commission will affect small business borrowers:
- It will become even harder for SMEs to secure finance.
- Banks will take longer to decision loan applications.
- The cost of finance will increase off the back of increased regulation.
What should SMEs do?
The good news is that more financing options are becoming available to SMEs and no longer is it a matter of having little choice outside of the major banks. The challenge will be to make sense of all the offerings in the SME finance space and that’s where Kelly+Partners Finance can assist.
With a deep understanding of the links between our clients’ personal and professional lives, Kelly+Partners offers a coordinated solution across a range of financial services: accounting, tax, superannuation, wealth management, finance, estate planning assistance and family office services.
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