Cashflow biggest concern for COVID-hit SMEs

Cashflow biggest concern for COVID-hit SMEs

As Australian small businesses grapple with the impacts of COVID-19, research conducted by one of Australia’s leading business payments providers, Finstro, has found cashflow is the biggest hurdle facing the sector’s recovery.

The survey of over 1,200 small businesses across Australia during July shows cashflow is the chief concern for one in three business owners.

As Australia steers its economy through the greatest challenge in 100 years, all eyes are on the small business community and the measures that will help this sector propel Australia’s recovery.

Finstro Chief Product Officer Tom Whitworth said cashflow support was critical to empowering SMEs to continue to trade and grow.

“It’s no surprise cashflow is the highest priority for small businesses in the current environment. Access to flexible finance facilities has arguably never been more important for SMEs looking to push through the challenges of operating through a pandemic.”

Mr Whitworth said SMEs were facing a “payments crunch” as they tried to balance delayed customer payment and a reduction in supplier trade terms.

“Suppliers, who are rightly concerned about securing payments in this challenging environment, are increasingly demanding shorter trade terms and, often, cash on delivery. This makes it difficult for small businesses who are looking to order supplies and reinvigorate their businesses after a period of significantly reduced trade or shutdown.”

According to Mr Whitworth, Finstro, which is one of the country’s largest providers of tailored cashflow solutions to SMEs, is seeing heightened need for flexible cashflow support.

“We are working closely with our SME clients to ensure they have the flexibility and support they need to keep their businesses going. Solutions like our line of credit, offer SMEs an invaluable security blanket, enabling them to invest in their future as and when they need to – and at no cost, when they don’t.”

SMEs maintain confident outlook

Finstro’s survey also highlighted the resilience of Australia’s small business community, with 65 per cent of those surveyed remaining highly confident about the outlook for business. The results were consistent across states with Victoria and WA respondents most confident, with 68 and 67 per cent of those states’ respondents ‘highly confident’.

The impact of COVID-19 on business was mixed, with 23 per cent reporting a high impact, 40 per cent reporting a moderate impact and 37 per cent reporting a low impact.

While the research was conducted prior to the deepening of Victoria’s ‘second wave’ COVID-19 crisis, Mr Whitworth said it was inspiring to see SMEs maintaining such a positive outlook.

“Australian small business has a reputation for resilience and it’s inspiring to see this continuing in the face of such an extraordinary challenge.

“Of those businesses surveyed who had closed as a result of COVID, 99 per cent said they had every intention of reopening – this reinforces the grit and fortitude which goes to the very heart of the SME community,” Mr Whitworth said.

“As we start to see promising signs on the COVID front and a reduction in daily case numbers, the outlook for businesses is improving. But there will be ongoing challenges to work through and Finstro will be focusing all of its efforts on supporting SMEs to survive – and thrive – through this period.”