The Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, says fresh data reveals the extent of the cashflow crisis for small and medium-sized businesses in Australia.
The latest SME Growth Index has found one in five SMEs are experiencing cashflow problems due to business loans being rejected.
According to the data, the percentage of SMEs reporting significantly worse cashflow has doubled since March 2018, with 7.3 per cent saying it is significantly worse and 12.3 per cent saying it is worse than the previous year.
“Australian small businesses are in the midst of a cashflow crisis and the SME Growth Index indicates the situation is getting worse,” Ms Carnell said. “Small businesses are telling us time and time again that a lack of access to funding is their biggest barrier to growth. This has major implications for the sector as a whole as well as the economy more broadly.”
The Index found just one in 10 SMEs saying they had no cashflow concerns in the past year. Also, more than a quarter of small businesses (27.8 per cent) said they had difficulty meeting tax payments on time – up by around 12 per cent from March 2018.
Ms Carnell noted that the findings highlight why it is important for small businesses to be paid on time.
“That’s why it has never been more important for small businesses to understand the range of funding options available on the market. The big four banks are not the only game in town!”
