Numerous data suggest that Australia’s small and medium enterprises (SMEs) face greater challenges in achieving financial stability in 2025 due to rising operational costs, fluctuating interest rates, and tightened bank lending policies.
Many SMEs also face staffing challenges while the Reserve Bank of Australia’s April 2025 Financial Stability Review highlighted a rise in company insolvencies, with smaller firms hit particularly hard by challenging economic conditions.
And while the Federal Budget 2025 announcements have provided some relief, some concerns remain. While initiatives like the $56.7 million Energy Efficiency Grants program offer financial support for upgrading appliances and enhancing energy efficiency, the scaling back of the Instant Asset Write-Off from $20,000 to $1,000 from July 1, 2025, is expected to significantly limit SMEs’ ability to invest in new equipment and assets.
Nick McGrath, CEO of Moneytech, commented, “SMEs are facing a perfect storm of financial challenges. Banks are tightening their belts, but the need for flexible, reliable financing with quick turnaround times has never been greater.”
For one, SMEs are encouraged to take advantage of the higher write-off limit while it remains in place by investing in essential assets and equipment before the July deadline so they can maximise their tax benefits and strengthen their financial reliance for the year ahead
The use of technology and non-traditional finance solutions are also an option. McGrath noted, “We’re seeing a significant shift in how SMEs approach financing. Business owners are actively seeking partners who understand their industry and can provide tailored solutions that align with their unique needs.”
Accurate cashflow forecasting is another critical aspect of financial resilience. McGrath explained, “Forecasting isn’t just a financial exercise; it’s about building resilience. It’s about anticipating challenges and having the flexibility to adapt quickly.”
Lastly, SMEs need to be agile and proactive by focusing on the process which not only ensures greater efficiency but also contributes towards a positive cashflow.
McGrath pointed out that the SMEs that adapt to new financial realities will be the ones best positioned for long-term success. “For many, this means moving beyond traditional financing and finding the right blend of smart forecasting, streamlined processes, and flexible funding solutions that fit their business needs,” he concluded.
