Prospa’s Paul Evans discusses how SME lenders can get ahead of the pack this year
Uncertainty is emerging as one of the big buzzwords throughout the lending markets in 2026.
As recently discussed in MPA, there is no clear path for interest rates in the new year, with some banking majors (Commonwealth Bank, NAB) expecting the Reserve Bank of Australia (RBA) to hike rates in the coming months, while other banking majors (Westpac, ANZ) expect the RBA to stick to the script at 3.6%.
This will-they-won’t-they dynamic is making it difficult to predict how competitive the market will be this year, not just in the home lending space, but in the SME finance space too.
Central bank rate rises – an unthinkable scenario mere months ago, turned plausible as inflation started to outpace expectations in the closing months of 2025 – would inevitably put upward pressure on SME loan pricing.
However, as Paul Evans, national sales manager at SME specialist Prospa explains, there are far more factors that go into SME loan pricing than the base rate set out by the RBA.
“Lenders weigh affordability against risk, and competition drives smarter ways to deliver value. That means flexible terms, faster approvals, and tools to help businesses manage cash flow.”
The goal? “Keep growth within reach, even when the cost of money climbs.”
Looking beyond rates
“Competition isn’t just about rates,” Evans says. “It’s shaped by access to capital, compliance pressures, tech innovation, and customer confidence, all of which shape the lending game.”
Liquidity and funding costs set the pace for affordability, explains Evans, while rising regulatory demands “add layers of complexity for lenders and brokers”.
He continues: “Smarter tools and embedded finance are speeding up decisions, and when SMEs feel strong, demand for funding surges.
“Put it all together, and the way lenders stand out comes down to three things: speed, flexibility, and a customer experience that truly delivers.”
According to Evans, there are a few big major ways that SME lenders will gain the upper hand in 2026:
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Practical innovation is “changing the game for brokers”, he says. “Embedded finance, payment innovations, and smarter decisioning tools are streamlining workflows and making it easier to move fast. These tools aren’t just nice to have – they’re becoming essential for staying competitive and delivering value quickly.
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Compliance and fraud controls, meanwhile, are becoming more important than ever. Evans explains: “Mandatory ID registries and credential protection are raising the bar for secure onboarding, while SMEs expect faster decisions and more cash flow management options without sacrificing compliance. Lenders that keep things simple, clear, and confidence-driven will win – and win big.”
As for Prospa, while uncertainty is part of the landscape, “it doesn’t change our commitment to speed, simplicity, and trust”, says Evans. “We lean into data-driven decision-making, keep risk settings sharp, and invest in technology that removes friction for brokers and business owners.”
Advice for brokers
With market uncertainty set to shape the SME lending space in 2026, Evans advises staying close to your customers and leaning into technology.
“Uncertainty creates questions, and brokers who can provide fast, informed answers will stand out,” he says. “Use decisioning tools, monitor policy cues, and keep conversations focused on solutions – whether that’s refinancing, restructuring, or accessing working capital. The brokers who combine speed with trust will keep winning, no matter the market mood.”
