Loans for Aussie Businesses Trading Abroad: Promoting Economic Growth

NBE Blog

Australia currently enjoys a relatively robust relationship with Ethiopia. Current exports to Ethiopia amount to $446 million, and imports from Ethiopia amount to $109 million.

With a population of 91.2 million people, Ethiopia has the potential to become a major trading partner for Australian small and medium-sized enterprises (SMEs). Ethiopia has seen increasing levels of FDI (Foreign Direct Investment) in hydropower at infrastructure, and Australian businesses are taking the initiative by investing more heavily in trade with Ethiopia.

For example, in 2016 Australian merchandise trade exports to Ethiopia (in thousands of dollars) amounted to $5,084,000, And imports from Ethiopia amounted to $24,309,000. The major Australian exports to Ethiopia in 2016 in terms of aircraft, spacecraft and parts were valued at $1,634,000, wheat at $1,160,000. Other major Australian exports in 2016 included tubes & pipes of iron and steel at $388 million, and telecom equipment & parts at $362 million. The biggest Australian imports from Ethiopia include coffee and substitutes at $23,096,000, oilseeds and fruits at $298 million, crude vegetable matter at $220 million and footwear at $192 million.

Australian Businesses Getting a Foothold with Non-Bank Lenders

Australian small business owners routinely have a problem when it comes to qualifying for the necessary financing to get their ventures off the ground. Typically, the traditional route is a bank or an established financial institution. Unfortunately, over time it has become increasingly difficult for small businesses (SMEs) to qualify for loans via banks and traditional institutions. This makes it difficult to benefit from bilateral trade (imports and exports) from Ethiopia and other rising economic powerhouses on the African continent.

Fortunately, there are multiple online lenders available to facilitate loan requests from Australian small and medium enterprises. It is certainly worth considering business loans from online lenders, given that it is easier to qualify than with traditional banks. Several of the leading small business loans providers such as Capify, Prospa, and sail offer unsecured loans to Australian businesses.

Australian SMEs will do well to evaluate the services provided by these small business loans companies, based on funding requirements, regulatory constraints, application approval processes, and credit profiles. Prospa offers funding in the regional $5,000 – $250,000, and clients are typically expected to wait between 1 and 2 days for a response to their application. This company offers unsecured business loans to clients.

Capify has been in the game for 15 years. It offers funding in the regional $5,000 – $400,000, and very few documents are required for the approval process. What’s equally encouraging is that the majority of client reviews are overwhelmingly positive and Capify offers unsecured business loans to SMEs generating a minimum of $10,000 per month in turnover.

Sail is yet another SME loan provider which offers funding in the region of $5,000 – $100,000. However new businesses will be required to meet the $6 million requirement, and a clear repayment schedule will be in place for unsecured business loans.

How Are Australian Businesses Shopping around for Loans to Kickstart Their Bilateral Trade Agreements with Ethiopia?

There are many considerations that Aussie SMEs should take into account before accepting loans from providers. For starters, the non-bank lender or bank lender needs to be fully approved by the authorities. The bigger the companies are, the more likely they are to have greater experience in providing loans, and have a more favourable rating from customers vis-à-vis unbiased reviews. In fact, the best business lenders reviews are typically those reviewed by credit loan aggregator platforms which presents SMEs with a range of options and evaluate them based on their strengths and weaknesses.

The application process is paramount. Aussie SMEs prefer the least red tape possible. And when it comes to the actual loans, it’s important to be able to use the loan capital for whatever purposes the business deems fit. Australia is currently ranked at #22 on Ethiopia’s global merchandise trade relationship spectrum, with 1.2% of all principal exports (as at 2016). There is tremendous potential in tapping into this lucrative market.

In terms of Ethiopia’s principal import sources, Australia is at position #46 at just 0.1%. This means that there is significant upside potential for Australian SMEs to export their products and services to this populous African country. By boosting Australia’s international exposure to the lucrative African market, economic growth can be improved and enhanced. SMEs are the most critical component of GDP growth down under, and bilateral trade agreements are a step in the right direction.