SME growth sentiment weakening: Scottish Pacific
(19 September 2016 – Australia) The latest round of newly listed debtor finance group Scottish Pacific’s SME Growth Index has found that SME growth sentiment is trending downwards amid cashflow and funding concerns.
Further, the Index found that around 44 percent of SME business owners and senior managers spend 12 hours a day, 6 days a week working on their business. The majority (89 percent) of business owners said they spend at least 50 hours or more on the business.
The firm’s CEO Peter Langham said the latest results show that SME confidence has taken a hit despite the resilience of the sector, which according to ABS statistics employs almost half of the 10.7 million Australians in the workforce.
“Over the past two years, SMEs predicting revenue decline have almost doubled (13.2 to 24.2 percent), while those predicting increases have halved their growth forecasts (8.6 to 4 percent),” Langham said.
For the first time since the Index began, SMEs forecasting positive growth (48.4 percent) are outnumbered by SMEs forecasting negative growth or no change (51.6 percent).
“The current environment is clearly placing pressure on Australia’s small to medium business community,” Langham added.
Cash flow named as top small business concern “SMEs nominated cash flow as the most stressful element of business. They cited credit conditions as a key barrier to growth. With the Index highlighting that cash flow keeps 72.5 percent of respondents awake at night, it’s crucial for these leaders to find the right funding to support their business,” Langham said.
“Businesses are increasingly looking beyond the banks to fund growth and to help ease cash flow concerns. From this time last year, there has been a 30 percent increase in SME owners planning to fund their growth using a specialist non-bank lender, with one in five now indicating their intention to do so.”
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