A specialist small business bank, Judo Bank, recently flagged three business loans had turned bad and the market reaction was swift. The shares lost 40% of their market value in a day as investors worried about the health of lending to the small business sector.
Small businesses have often reported challenges in getting access to finance, and in recent years have increasingly turned to non-bank lenders or specialist providers such as Judo. It’s not unusual for a small business owner to have to pledge a major asset, such as the family home, as collateral against a business loan.
