As the traditional Christmas shutdown period looms, with cash flow tightening and trading slowing across most industries, Australian small and medium enterprise operators are warned that they might struggle due to their ‘reactive’ approach to finance.
Reece Ketu, group head of sales and distribution at nonbank lender Moneytech, explained that while the holiday period has traditionally been the most challenging window for managing supplier payments, payroll, and delayed receivables, many business owners still wait until they are already under pressure before seeking funding.
“We see businesses wait until they’re in a cash flow crunch before asking for help. By that point, their options shrink, and the cost of funding inevitably increases,” Ketu said. “The SMEs that enter the new year strongest are the ones thinking 12 to 24 months ahead.”
Andrew Beckett, head of broker and third-party distribution at Lend, added that December routinely brings a spike in funding applications from SMEs experiencing a cashflow crunch, with these applications focused on resolving the immediate cash gap rather than planning for the coming year.
“If you wait until you need money yesterday, the servicing position simply isn’t there anymore,” Beckett warned. “The good operators don’t hit December in panic mode. They’re forecasting costs, anticipating delays and working with brokers long before the pressure arrives.”
Both lenders noted that the seasonal strain is particularly acute in sectors vulnerable to long payment terms, contract delays or weather disruptions. Construction remains among the hardest hit, with unpaid invoices from head contractors often stretching over months while costs continue. Transport operators have also faced pressure this year, with cyclone-related road closures in Queensland leaving some unable to complete deliveries for weeks.
Ketu said that such events highlight how quickly seasonal disruptions can tighten cash flow. “When storms, flooding or heatwaves interrupt work for several weeks, the gap between outgoing and incoming payments widens very quickly. Businesses need enough headroom in their cash flow planning to absorb those shocks.”
Forward planning has also been cited as of utmost importance during this period. Ketu explained, “December and January tend to expose any gaps in planning. The more visibility SMEs have over the commitments they’re taking on, the easier it is to manage the natural ebb and flow of this period.”
“A bit of forward thinking can make the difference between starting the new year under pressure or starting it with momentum,” he concluded.
