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The RBA has hosted its first roundtable with major banks, academics, small business owners and small business organisations. The positive to take from the RBA’s previously zero understanding of small business is that now the bank is being educated.
While there were a number of interesting findings none were news to small business operators.
The RBA found that small businesses tend to have lower survival rates and more volatile revenues than larger firms and found economic conditions over recent years had been more challenging for small business than large firms, partly reflecting differences in the industries in which they operate. SmartCompany
The RBA has rightly pointed to numerous positives to be realized when small business has a standardized definition;
Achieving a uniform, precise and relevant definition may help provide a clearer picture of small businesses’ contribution to various aspects of economic activity, as well as conditions and challenges faced by the sector.
In relation to financing, a uniform definition could assist analysis of issues such as access to finance, interest rates faced by small business borrowers, lenders’ loan-to-valuation standards, and financial institutions’ aggregate exposure to the small business sector.
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