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No One-Size-Fits-All Solution to Business Cash Flow Challenges

No One-Size-Fits-All Solution to Business Cash Flow Challenges

(19 April 2024 – Australia) Not only have 87 percent of SMEs encountered a cash flow crunch in the past year, but just over 80 percent of all businesses are now considering financing options to navigate liquidity constraints new CBA research shows.

Recent East & Partners research commissioned by CBA revealed the vast majority want access to pre-approved lending facilities, indicating a broader desire to seize opportunities when the time is right. When financing equipment and vehicles, almost two in three businesses (63 percent) believe adjusting repayment cycles would aid their cash flow. The remainder agreed that variable repayments would help. More specifically, the top-rated areas of support are options for a payment-free period when equipment is first delivered, repayments set to seasonal cash flows and lower initial repayments that step up over time.


Evidence of persistent cash flow challenges can be seen across the Australian business landscape. The forces prompting calls for financing support are well established. Higher interest rates and operating costs amid stubborn inflation are among them and are expected to continue even as relief looms on the horizon. However, businesses are determined not to let cash flow limitations hold back their growth plans.


“The research reflects the rising demand among customers for equipment financing that is structured according to individual business needs. No two businesses are the same, so it's no surprise that businesses want equipment lending options that are fit for purpose" commented CBA General Manager of Asset Finance, Chris Moldrich.


"In an environment where cyclical and seasonal factors are impacting cash flows, businesses need the ability to set their repayments to move in line with these factors or choose the right frequency like monthly or quarterly accordingly. When evaluating equipment financing loans, certain features relating to fees and repayments can optimise cash flows. This includes the ability to select the amount, repayment frequency, and total duration of the loan upfront, options to vary the ongoing repayment amounts through end-of-term lump sum repayments, customised documentation fees depending on the loan agreement type and not having to provide extra security against the loan” Moldrich added.

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