$229.8bn potential revenue for SMEs lost due to cash flow issues
(15 March 2018 – Australia) Over the past year SMEs have lost A$229.8bn in potential revenue due to cash flow issues, according to the latest Scottish Pacific SME Growth Index.
Despite the loss of potential revenue, SMEs are optimistic about revenue growth with two-thirds reporting better or significantly better cashflow compared to 12 months ago.
Peter Langham, Scottish Pacific CEO said the March 2018 Index shows 50 percent of SMEs forecasting positive growth revenue by an average of 4.3 percent.
For SMEs planning to invest in expansion over the coming 6 months, more than one in five plan to use alternatives to their main bank. These SMEs are likely to use debtor financing which was the top alternative working capital solution in 2017, used by 77 percent.
“For growth SMEs using alternative funding options, debtor finance is by far the most popular working capital choice,” Mr Langham said.
He added that the growth potential for the non-bank lending sector is significant, given that 48 percent of SMEs who didn’t use non-bank lending in 2017 are considering it for 2018.