Small SMEs Three Time More Likely to Use Personal Finance to Support their Operations– ScotPac
(5 June 2023 – Australia) Australian small to medium sized enterprises (SMEs) with annual revenue up to A$5 million are three times more likely to tap into personal finance facilities like credit cards to manage rising business costs than larger SMEs with revenues of between A$5 million to S$20 million.
SMEs are snubbing personal finance for business costs according to newly released Scotpac voice of the customer research.
The analysis, conducted in Q1 2023 by East & Partners, was based on direct interviews with 720 SMEs with annual revenues ranging from A$1 million to A$20 million. The research found almost one in two SMEs reported that they had never used personal finance sources for business purposes (47 percent), representing a significant shift from just over one in ten in 2016 (12 percent).
ScotPac CEO Jon Sutton recognised the positive trend of decreased reliance on personal finance for business costs but highlighted a pressing need for further development.
“There are still too many SME owners mixing their personal and business finances. SME owners mixing personal and business finances is detrimental to financial stability” stated Mr Sutton.
“There is an outdated perception that access to new business finance or to refinance an existing facility is too hard for small SMEs. ScotPac has the most flexible range of SME finance products in the market and the scale to deliver cost-effective solutions across a breadth of industries and business situations.
“Over 35 years of operation we have become a trusted partner to thousands of SMEs large and small, and our team are there to support business owners every step of the way. So, before tapping into a personal finance facility, small business owners should be tapping their broker on the shoulder for advice,” Mr Sutton said.
“While larger SMEs historically had access to a broader range of debt funding sources than smaller businesses, there are now a host of tailored and accessible non-bank finance products to support most SMEs in most situations. These include invoice finance facilities that provide working capital while SMEs are waiting for client payments, and online business loans that can see funds approved and dispensed in as little as 24 hours.”