SMEs are the most numerous type of business by size in Australia, and are significant employers, despite there being some uncertainty about how to define them.
Some Commonwealth legislation extends protections that were designed to protect consumers to certain small businesses, but these extensions do not encompass all businesses likely to be defined as SMEs.
There are several different legal structures available for SMEs to carry on a business. As the extent of legal separation from the business owners increases, the degree of separation of the business owners’ finances from those of the business typically also increases. However, many SMEs rely upon the personal finances of their owners as security to obtain access to finance, regardless of the type of legal entity in which the business is carried on.
Banks are the main source of lending for all businesses, including SMEs, in Australia.
SMEs may also enter into relationships with financial services entities for other financial products, such as cashflow finance management, and for access to payments systems such as credit card systems and EFTPOS terminals.