Sky Business News – David Hornery discussing finance and capital for SMEs

Sky Business News – David Hornery discussing finance and capital for SMEs


(upbeat music plays) – [Narrator] On Sky News
Business, this is The Enterprise. – Hi there, and welcome to The Enterprise. A show devoted solely to issues affecting your small business. I’m your host Chloé James. Ahead on today’s show,
we’ll get the latest on getting your SME
into the Chinese market with Vanessa Xing from the
Australia China SME Association. But first, for many small businesses, securing finance can be a
long and arduous process. A process which can leave many of you unable to meet the capital requirements to grow your business. And for some of you,
turning to the family home as a means of security when
dealing with the banks. A proposition that carries with it a resounding amount of risk. But, my next guest has
drawn upon over twenty years experience in banking
at the high end of town to come up with a solution that he feels can revolutionize the
way your small business can get access to finance, opening the door for your
small business to grow. Joining me in the studio this
evening is David Hornery, co-founder and CEO of Judo Capital. David, welcome. – Lovely to be here, Chloé. – Lovely to have you here. And let’s just quickly talk a little bit about your background. I know it was hugely in business banking and then to what you’re doing now. – So I’ve had thirty plus
years actually in banking. And along with my co-founder
Joseph Healy and I, we’ve been building Judo for
about the last three years. It’s very much been something that’s been built up from the ground to be
the best practice proposition to small business in the country. And we’re incredibly proud of it. It’s something that we’re
both passionate about. The team that we’ve put together is incredibly passionate
about and we’re very excited to be coming to market over the course of the next few weeks. – We’re right on the heel of it. It’s such exciting times. Is this because when you were in the business banking world,
you were seeing things not being done quite right for SME’s? – Oh, absolutely. Judo
has been purpose built from the ground up to be that
best practice proposition. What that means is we do SME
only. That’s all that we do. We’re staffed by SME specialists. But, what it also means
in a practical sense is things like we’ll turn
everything around in five days. That the bank you’re sitting
across the table from can actually make a decision. That it takes one person to say yes and two people to say no. Look, I think at its heart, and what you’re kind of
getting to with the question is at the heart of Judo is a willingness and a bandwidth and
intent to sort of sit down and listen to the customer. To really listen to them and understand them and their business,
and what they worry about, and what they aspire to. And actually to build a complete
picture of the business. And, in many ways, that’s
kind of almost going back to what banking used to be. Banking as it used to be.
Banking as it really should be. – Yeah, it’s such an interesting piece and I love this sort of tailoring, getting to know the business. I’m sure everybody watching
The Enterprise tonight– Everybody has their own unique business, their own unique needs. Finance, obviously. There’s not much to a
business without finance. How crippling and difficult
can financial constraints be on an SME and what are you
doing and looking to do to really help SME’s with
their financial needs? – Yeah that’s a great question. I think one of the things that struck us is that the craft of banking
SME’s, I think, has actually been on the decline for a number of years. And fundamentally what we’ll
do, as I said, is to sit down and actually listen to customers
talk about their business. They’re in all ranges
of different industries. And form a view about
their business as a whole. And then build a facility for them. A lending facility that suits. That is tailored to
them, to use your words. That is the right term,
it’s the right product, it’s the right structure and
it fits what they really need. But, you’ve gotta take the
time and have the intent to actually build that
understanding to form that view. And that really contrasts
against the much more cookie-cutter approach
that’s very prevalent in today’s market, which is how much is your house worth? I’ll lend you against that. – Well, we had that great conversation before we came to air, didn’t we? And it really is that
that is the one big asset. But, it’s also the thing that that’s that one sure bricks
and mortar piece that you have if people are lending against that, borrowing against that, I should say. It can get into really
sticky situations kind of. And such a bone of contention
and a worry for SME’s putting their house on the line like that. – Yeah, and in many cases they
shouldn’t actually have to. There are so many great
quality businesses in Australia that have got long track
records, great customers, great products. They’re really innovative. And that you should actually
be able to tailor something. Sometimes the house might be
required, sometimes its not. There’s a whole range of different ways. The four C’s of credit assessment. It’s about the cash flow
and its about the capital in the business and it’s about
the quality of management. Not just the fact that
there’s a mortgage available. – Not just that there’s a house. Yeah. So can you site other fantastic assets or how you piece together
different proposals for SME’s? What else they could be using? – Well, absolutely. So, the first thing that you
look at is the cash flow. How strong is the cash flow? What’s the quality of management? How long is the track
record? How many customers? What’s the consistency
of their performance? You ask all of those questions. And then the last question
you ask is about collateral. And then you come to a commonsense answer based on an understanding
rather than a simplistic answer based on what’s the security. There’s so many businesses in Australia that absolutely deserve to
be assessed on their merits. – Well, yes. Absolutely. And on the Enterprise, we
would a hundred percent agree with that. We are a
show that supports SME’s, a community in Australia. Ninety
eight percent of businesses made up of small
businesses in this country. We’ve gotta wrap soon,
David. I love your passion talking about the industry. It’s obviously a industry
you’re passionate about. I love that you have a
business that’s actually an SME supporting other SME’s. So you really know what it feels like. Just quickly, technology. I just want to quickly bring
that into the conversation because technology is such a big piece. It’s so important for SME’s. How important is it in your
view and how is it helping the SME community in Australia today? – Technology is hugely important for us. We’ve been blessed with a
fabulous technology team. And the benefit of
starting with a blank sheet that we have with Judo means
we’ve actually been able to bring absolute cutting-edge technology that’s hugely flexible in from day one. And it kind of has two impacts. The first is on the customer experience. It’s very intuitive.
it’s very easy-to-use. It’s very seamless. But, probably more importantly,
what it allows us to do is to free up our bankers
because the [Inaudible] it’s to be out there in
the field with customers building those relationships. And I think it’s true of the
rest of the business as well. We talk about financial capital but for us the human capital
that we bring to bear is every bit as important
in deploying that. And that’s all about the
passion of the people that we’ve got, their
capabilities as bankers, and just their drive to
look after small business. – And it sounds like they do. And then technology just enables that. – That’s exactly right. We
have fantastic technology, but we don’t define ourself by it. It’s an enabler of our
relationship proposition. – The human element, I love it. David, thank you so much. – Glad to be here. – Judo Capital. So
great to hear your story and what you’re doing for the industry. – Thanks so much Chloé. – Thank you.

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