It will be no surprise to many small business owners that access to finance to operate, to grow, or to expand is an enduring challenge.

We know from our research with small businesses across the country that many struggle to obtain finance from commercial institutions. They end up leaning on friends or family or incur substantial debts on credit cards to grow their business. In our research conducted with more than 2,000 small- to medium-sized businesses we found a third rely on family and close friends for debt finance.

Not only is this a risky way to fund a business, it also limits the growth of many otherwise highly productive businesses that have the potential to contribute significant value and jobs to the economy.

There are a number of reasons for this situation. One reason is that the funding requirements of small businesses often do not fit into the standard criteria for commercial lending, given the small amounts involved in transactions and the lack of security offered. Another issue is regulation in Australia tends to make it more attractive for banks to provide home loans over small business lending.

This results in a fundamental gap in the Australian market, where small businesses are not getting the finance they need to grow to their potential.

With new changes to Efic’s lending ability announced this week by the federal government, this situation will be eased for small businesses involved in exporting or those in an export-related supply chain.

Efic will gain new flexibility to lend directly to small businesses in need of finance to fund their export operations. In particular, the changes mean we will be able to lend to small businesses for the export of all goods, not just capital goods, which will expand the pool of smaller exporters that are eligible for financial support.

Importantly, this will help reduce the substantial administrative burden and financial costs SMEs face when accessing export finance. Rather than having to deal with both a bank and Efic, which currently provides financial guarantees to banks to enable them to lend to small businesses, these enterprises will be able to deal directly with Efic, reducing the investment of time and money in the process.

These changes strengthen the work Efic has already done this year to make it easier for Australian exporters to conduct business.

We know small exporters have a need for a flexible and efficient lending process, so we have been working on reducing turnaround times on transactions through a new accelerated execution process. Last year the average turnaround time for a transaction was 180 days; we have already got this down to 105 days and are looking at reducing this further.

We have also introduced standard form documentation so applications for finance can be approved more readily, as we know smaller businesses often have an onerous administration burden and don’t have the time to read and understand complicated documents.

In an effort to provide support to more small businesses, we have also reduced minimum support thresholds from $500,000 to $200,000, and will contemplate smaller transactions on a case-by-case basis.

Fundamentally, we want to make it easier for more small businesses to enter and succeed in international markets. SMEs are one of the biggest employers in the country, a valuable source of innovation and a key driver of increasing productivity, yet accessing finance can often be a big stumbling block when it comes to growing overseas.

These changes will go a significant way to help achieve this, by simplifying and streamlining the process of accessing finance that most exporters need to go through at some point of their journey.

Ultimately, providing a wider range of services to Australian small and medium exporters will enable them to pursue trade and investment opportunities in the global market place, contributing to valuable growth and job creation.

Andrew Hunter is Efic's managing director.