If you own or manage a regional small-to-medium enterprise (SME), you’ve probably noticed the lending landscape shifting. In recent years, many major banks have reduced their appetite for certain types of regional asset finance. This change has left some businesses looking for new ways to fund essential equipment, vehicles, and expansion plans.
The good news? There’s now a wider range of alternative finance options available, options that can be tailored to the unique needs of regional industries like agriculture, transport, construction, and tourism.
At Force Finance South West, we work with a broad panel of lenders to help clients explore what’s possible, making sure the finance is suited to their goals, cash flow patterns, and risk profile. Here’s a closer look at what’s out there.
Why Major Banks are Pulling Back from Regional Asset Finance
While every bank has its own policies, several trends have led to a more cautious approach:
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Risk appetite changes – Some banks are tightening lending criteria, especially in sectors where asset values can fluctuate or resale markets are limited.
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Branch closures and centralised decision-making – Fewer regional branches can mean less local insight in lending decisions.
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Preference for larger-scale transactions – Smaller asset purchases can sometimes fall outside a bank’s target profile.
For many SMEs, this doesn’t mean funding isn’t possible—it just means the search for the right lender may take you beyond the ‘big four’.
The Alternatives: Non-Bank Lenders, Fintech Platforms, and Agri-Focused Funds
The finance sector has evolved well beyond traditional banks. Some of the options that might suit regional SMEs include:
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Specialist non-bank lenders – Often focused on specific industries or asset types, with lending criteria tailored accordingly.
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Fintech platforms – Online-based lenders that can offer quicker application processes, sometimes with flexible document requirements.
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Agri-focused funds – Purpose-built finance products for farmers, growers, and agri-business operators, often with seasonal repayment features.
These lenders can sometimes accommodate situations where bank policy is more restrictive – for example, funding older assets, lower-value purchases, or niche equipment.
Funding Structure: Picking the Right Product for the Job
Just as no two businesses are identical, no two finance structures are the same. Some common options include:
1. Chattel Mortgage
• You own the asset from the outset; the lender takes a mortgage over it as security.
• Potential GST and depreciation benefits (always check with your accountant).
2. Rental or Operating Lease
• You rent the asset for an agreed term, often with the option to return or upgrade.
• Can assist with cash flow by avoiding a large upfront outlay.
3. Secured Business Loan
• Funds may be secured against multiple assets or property.
• Often used for mixed purchases, working capital, or expansion projects.
The right product depends on your objectives—whether that’s ownership, flexibility, cash flow management, or tax efficiency.
Structuring Repayments Around Seasonal Cash Flow
Regional SMEs—particularly in agriculture—know that cash flow isn’t always steady year-round. Some alternative lenders offer flexible repayment options, such as:
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Seasonal payments – Higher repayments in harvest months, lower in quieter periods.
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Quarterly or half-yearly schedules – Matching major income events.
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Interest-only periods – Short-term easing of cash flow pressure during start-up or expansion.
This flexibility can be the difference between comfortably managing repayments and feeling the pinch in a slow season.
Key Credit Considerations in Asset Finance
Whether you apply with a bank, non-bank lender, or fintech platform, certain fundamentals remain important:
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Asset age – Newer assets can be easier to finance; older assets may still be fundable depending on type and condition.
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Resale value – Lenders assess the asset’s market value over the term.
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Serviceability – Your ability to meet repayments based on income, expenses, and commitments.
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Security position – The lender’s rights over the asset or other collateral.
Understanding these factors can help you prepare stronger applications and anticipate any extra information a lender might request.
Government Backed Guarantees and Regional Grant Co-Funding
Some SMEs may also be eligible for additional support:
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Government guarantee schemes – Programs where the government guarantees part of the loan, potentially helping businesses that meet certain criteria.
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Regional development grants – Funding from local, state, or federal bodies to co-fund equipment purchases, technology upgrades, or expansion projects.
These programs have specific eligibility rules and application timelines, so it pays to check well in advance of making a purchase decision.
Your Due Diligence Checklist
When comparing finance offers, especially from new or unfamiliar lenders, it’s worth looking beyond the headline rate:
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Total cost, not just interest rate – Include establishment fees, documentation charges, ongoing fees, and any final payment or residual.
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Early payout flexibility – Can you pay out early? If so, are there penalties or savings?
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Security terms – Is the finance secured only against the asset, or against other business or personal property?
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Repayment structure – Does it match your income pattern? Is it fixed or variable?
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End-of-term options – For leases, will you own the asset, return it, or need to refinance a residual?
Bringing It All Together
For regional SMEs, alternative funding options aren’t just a ‘second choice’—they can be a strategic advantage. By exploring beyond the big banks, you may find finance that better matches your industry, cash flow, and business goals.
The key is doing your homework, comparing the full picture, and working with someone who understands both your region and your sector.
At Force Finance South West, we help businesses navigate this process with clear explanations, access to a range of lenders, and support from application through to settlement. That way, you can spend less time chasing finance and more time growing your business.