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Small Business Sector Ready to Grow Once Lockdown Cycle Ends - ScotPac

Small Business Sector Ready to Grow Once Lockdown Cycle Ends - ScotPac

(23 September 2021 – Australia) National SME Growth Index research by leading non-bank lender ScotPac found just over half (50.1 percent) SMEs are forecasting business H2 2021 revenue growth.

(23 September 2021 – Australia) National SME Growth Index research by leading non-bank lender ScotPac found just over half (50.1 percent) SMEs are forecasting business H2 2021 revenue growth.

With lockdown rules and border closures regularly changing, SME owners are looking beyond these constraints and focusing on how they can adapt and grow. But low Victorian SME growth optimism sends a stark warning for NSW on the impact of lockdowns for the small business sector.

An average revenue increase of 4.8 percent represents a healthy uptick from a year ago (4.4 percent). An increasing proportion of businesses identify as struggling. A record high (15.7%) are in outright decline - this percentage has almost doubled since research began in 2014.

Out of 1255 businesses, 727 (57.9 percent) were looking to invest back into the business. This is a significant jump from late 2020 when a four-year low of 51.9 percent was recorded. ScotPac CEO Jon Sutton said polling also revealed a promising increase in the proportion of SMEs planning to invest in their business through to the end of 2021.

  • Half of SMEs forecast higher revenue through to end of 2021
  • Strong uptick (almost to pre-pandemic levels) in those looking to invest in their business
  • However more than 1 in 4 SMEs forecast revenue will decline (highest recorded level), with a similar proportion expecting revenue to stagnate

“This brings investment intention almost back to pre-pandemic levels. It’s important to note the research took place over six weeks before and in the early days of the NSW Delta outbreak. Findings indicate that if we can get past lockdowns and border restrictions, a slim majority of the SME sector is backing its ability to achieve revenue growth” ScotPac CEO Jon Sutton stated.

“At the other end of the spectrum, negative growth SMEs are finding it tougher than ever. The impact of Victoria’s 2020 extended lockdown is still being felt by the small business sector, something NSW should be mindful of as they look towards reopening. Small business winners and losers are increasingly separated by location and industry” Mr Sutton added.

“Our past three research rounds have seen consecutive results with the highest number of contracting SMEs as at any time since 2014. Given the optimistic growth prospects of half the sector, combined with the warning signs for the troubled end of the SME sector, the next 12 months are likely to see strong restructuring and M&A activity” commented Mr Sutton.

“This is yet another reason for small business owners to ensure they are getting professional advice to guide their enterprises and the right funding to fuel their business activities and allow them to survive and thrive.”

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