Low interest rates and their impact on financing SMEs

Updated On
Feb 17, 2021
By
Grow Finance

As economies around the world fluctuated their way through the last year, Australia was no exception to the strains on its economy. Australia’s interest rate currently remains on hold at a historic low of 0.1 percent, as the nation prepares to rebound from the economic battering caused by the global pandemic.

However, companies and governments face rising borrowing costs as the Reserve Bank of Australia fails to suppress bond yields and the strong Australian dollar, despite the central bank’s aggressive $3 billion of bond purchases last month.

Official interest rates have always had an impact on business owners throughout the country, however, they are more important to those running small and medium-sized businesses. This is because the interest rate naturally impacts the costs of borrowing money or taking out finance, and therefore the costs of running their businesses.

Most SMEs rely on some form of finance or loans in order to fund their business activities. Small and medium-sized businesses can sometimes struggle to meet their cash commitments, such as payments to vendors, or investing in new technology or extra assets for their growing businesses. Business loans are a great way for SMEs to have a normal cash flow available, in order to get on top of outgoings while growing, yet not needing to reduce control by selling down equity.

Currently, with the low-interest rates in Australia, it means that borrowing can be more affordable, which is a great opportunity for small and medium-sized businesses to take advantage of their access to finance options. When interest rates are lowered it reduces the cost of borrowing and usually makes repayments more affordable.

It is important for small and medium-sized business owners to be aware of the impact that interest rates can have on any finance

“It is expected that as the interest rate decreases in Australia, it could easily spur SMEs to consider financing and borrowing options, and even borrow more than they originally would have, if interest rates were higher.”

Since interest rates are always going to be out of your control as a small or medium-sized business owner, it is more important to focus on what you can control, such as the lender you choose to help finance your SME. Finding the right lender can sometimes be difficult, as your options can be limited. Some lenders will choose not to lend to or make it extremely difficult to lend to an SME, so you need a non-bank lender like Grow Finance.

Grow Finance makes the process easy, with tailored solutions to suit your specific circumstances. If your SME needs finance to assist, and you don’t have access to a bank lender, or do not have time for the lengthy approval process, then a non-bank lender such as Grow Finance is your best option.

The Grow Finance loan approval process provides a faster alternative to bank lenders and you can have those funds readily available, so you can get back to running your business with the ability to grow and expand.

Privacy Policy
Our Privacy Policy describes how we collect, use and manage your personal information.
Who are we?
‘We’, ‘us’ and ‘our’ refers to;
Our commitment to protect your privacy

We understand how important it is to protect your personal information. This document sets out our privacy policy commitment in respect of personal information we hold about you and what we do with that information.

We recognise that any personal information we collect about you will only be used for the purposes we have collected it for or as allowed under the law. It is important to us that you are confident that any personal information we hold about you will be treated in a way which ensures protection of your personal information.

Our commitment in respect of personal information is to abide by the Australian Privacy Principles for the protection of personal information, as set out in the Privacy Act 1988 (Cth) and any other relevant law.

Personal information

When we refer to personal information, we mean information from which your identity is reasonably apparent. This information may include information or an opinion about you. The personal information we hold about you may also include credit information.

Credit information is information which is used to assess your eligibility to be provided with finance and may include any finance that you have outstanding, your repayment history, defaults, personal insolvency information and court proceeding information. Usually, credit information is exchanged between credit and finance providers and credit reporting bodies. The kinds of personal information we may collect about you include your name, date of birth, address, account details, why you are applying for a particular product, details of superannuation policies, details about your motor vehicles, occupation, details about your assets and liabilities and any other information we made need to identify you.

If you are applying for finance we may also collect the ages and number of your dependants and cohabitants, the length of time at your current address, your employment details and proof of your earnings and expenses. If you apply for any insurance product through us we may also collect your health information. We will only collect health information from you with your consent.

We may also collect sensitive information about you. We will only collect sensitive information from you. Sensitive information may include information about your health, ethnic origin, or criminal records.

Why we collect your personal information
We collect personal information for the following purposes:

From time to time we may offer you other products and services. To enable us to maintain a successful business relationship with you, we may disclose your personal

information to other organisations that provide products or services used or marketed by us. The types of organisations to which we are likely to disclose information about you to include other mortgage intermediaries, lenders, valuers, lenders mortgage insurers, surveyors, accountants, credit reporting bodies, recoveries firms, debt collectors and lawyers. We may also disclose your personal information to any other organisation that may have or is considering having an interest in your finance, or in our business.

How do we collect your personal information?

Where reasonable and practical, we will collect your personal information directly from you. We may also collect your personal information from credit reporting bodies and from finance brokers and other people such as accountants and lawyers, your creditors, the various state Land Titles Offices and Road Traffic Authorities, and other government agencies including or as provided for under Australian law.

Do we disclose your personal information?
We may disclose your personal information:

Prior to disclosing any of your personal information to another person or organisation, we will take all reasonable steps to satisfy ourselves that:

(a) the person or organisation has a commitment to protecting your personal information at least equal to our commitment,

(b) you have consented to us making the disclosure; or

(c) we are required to make the disclosure under Australian law.

We may use cloud storage to store the personal information we hold about you. The cloud storage and the IT servers may be located outside Australia. We may disclose your personal information to overseas entities that provide support functions to us, including India. You may obtain more information about these entities by contacting us.

Credit information
We may collect the following kinds of credit information and exchange this information with credit reporting bodies and other entities:

We exchange this credit information for the purposes of assessing your application for finance, managing that finance, discharging our functions under the Bankruptcy Act 1966 (Cth) or providing business options. This credit information may be held by us in electronic form on our secure servers and may also be held in paper form. We may use cloud storage to store the credit information we hold about you.

When we obtain credit information from a credit reporting body about you, we may also seek publicly available information and information about any serious credit infringement that you may have committed. We do not disclose your credit information overseas.

Notifiable matters

The law requires us to advise you of ‘notifiable matters’ in relation to how we may use your credit information. You may request to have these notifiable matters (and this privacy policy) provided to you in an alternative form. We exchange your credit information with credit reporting bodies. We use the credit information that we exchange with the credit reporting body to assess your creditworthiness, assess your application for finance, manage your finance, and administer your debt or personal insolvency agreement.

If you fail to meet your payment obligations in relation to any finance that we have provided or arranged or you have committed a serious credit infringement then we may disclose this information to a credit reporting body. You have the right to request access to the credit information that we hold about you and make a request for us to correct that credit information if needed. Please see the heading “Access and correction to your personal and credit information”, below.

Sometimes your credit information will be used by credit reporting bodies for the purposes of ‘pre-screening’ credit offers on the request of other credit providers. You can contact the credit reporting body at any time to request that your credit information is not used in this way. You may contact the credit reporting body to advise them that you believe that you may have been a victim of fraud. For a period of 21 days after the credit reporting body receives your notification the credit reporting body must not use or disclose that credit information. You can contact any of the following credit reporting bodies for more information:

veda.com.au,
dnb.com.au, or
experian.com.au

Direct marketing

From time to time we may use your personal information to provide you with current information about finance, offers you may find of interest, changes to our organisation, or new products or services being offered by us or any company with whom we are associated. If you do not wish to receive marketing information, you may at any time decline to receive such information by telephoning us on 1300 001 420 or by writing to us at PO Box R196 Royal Exchange NSW 1225 or finance@growfinance.com.au. If the direct marketing is by email you may also use the unsubscribe function. We will not charge you for giving effect to your request, and will take all reasonable steps to meet your request at the earliest possible opportunity.

Updating your personal information

It is important to us that the personal information we hold about you is accurate and up to date. During the course of our relationship with you, we may ask you to inform us if any of your personal information has changed. If you wish to make any changes to your personal information, you may contact us. We will generally rely on you to ensure the information we hold about you is accurate or complete.

Access and correction to your personal and credit information

We will provide you with access to the personal and credit information we hold about you. You may request access to any of the personal information we hold about you at any time. We may charge a fee for our costs of retrieving and supplying the information to you. Depending on the type of request that you make we may respond to your request immediately, otherwise we usually respond to you within seven days of receiving your request. We may need to contact other entities to properly investigate your request.

There may be situations where we are not required to provide you with access to your personal or credit information, for example, if the information relates to existing or anticipated legal proceedings, or if your request is vexatious. An explanation will be provided to you, if we deny you access to the personal or credit information we hold about you.

If any of the personal or credit information we hold about you is incorrect, inaccurate or out of date you may request that we correct the information. If appropriate we will correct the personal information at the time of the request, otherwise, we will provide an initial response to you within seven days of receiving your request. Where reasonable, and after our investigation, we will provide you with details about whether we have corrected the personal or credit information within 30 days.

We may need to consult with other finance providers or credit reporting bodies or entities as part of our investigation. If we refuse to correct personal or credit information we will provide you with our reasons for not correcting the information.

Using government identifiers

If we collect government identifiers, such as your tax file number, Centrelink customer reference number, passport number or driver’s license details, we do not use or disclose this information other than required by law. We will never use a government identifier in order to identify you.

Business without identifying you

In most circumstances it will be necessary for us to identify you in order to successfully do business with you, however, where it is lawful and practicable to do so, we will offer you the opportunity of doing business with us without providing us with personal information, for example, if you make general inquiries about interest rates or current promotional offers.

Sensitive information

We will only collect sensitive information about you with your consent. Sensitive information is personal information that includes information relating to your racial or ethnic origin, political persuasion, memberships in trade or professional associations or trade unions, sexual preferences, criminal record, or health.

How safe and secure is your personal information that we hold?

We will take reasonable steps to protect your personal information by storing it in a secure environment. We may store your personal information in paper and electronic form. We will also take reasonable steps to protect any personal information from misuse, loss and unauthorised access, modification or disclosure.

Complaints

If you are dissatisfied with how we have dealt with your personal information, or you have a complaint about our compliance with the Privacy Act and the Credit Reporting Code, you may contact our complaints officer on 1300 416 748 or by writing to us at PO Box R196 Royal Exchange NSW 1225 or finance@growfinance.com.au will acknowledge your complaint within seven days. We will provide you with a decision on your complaint within 45 days.

Further information

You may request further information about the way we manage your personal or credit information by contacting us.

Change in our privacy policy

We are constantly reviewing all of our policies and attempt to keep up to date with market expectations. Technology is constantly changing, as is the law and market place practices. As a consequence we may change this privacy policy from time to time or as the need arises. You may request this privacy policy in an alternative form. This Privacy Policy came into existence on 19 November 2014.