SME confidence is falling as the upcoming surcharge reforms and compliance changes are adding pressure to their operations, according to new research from Prospa and YouGov.
The Prospa SME Sentiment Report for May shows that 60 per cent of SMEs are confident they can remain cashflow positive over the next 12 months, down from 70 per cent in February. In that pool, only 24 per cent now feel very confident, dropping from 32 per cent.
Nearly half of SMEs have increased prices in the past three months to offset rising input costs and inflation, reflecting the ongoing pressure on margins. Sole traders are the most affected, with nearly one in five reporting they have no cash reserves at all.
The upcoming ban on card surcharging from October 1 is creating further uncertainty. Among the 62 per cent of SMEs that accept card payments through a merchant payment service, 54 per cent expect the ban to impact how they set prices.
While 41 per cent anticipate only slight increases, 13 per cent say they will need to increase prices significantly. Two in five (40 per cent) plan to absorb the cost and keep prices the same.
Payday Super is another key pressure point for SMEs, as gaps in readiness remain ahead of the July 1 deadline.
In February, 19 per cent of SMEs said they were not prepared and 14 per cent were unsure. In May, the proportion not prepared increased to 23 per cent, with a further 14 per cent still unsure.
The change is already influencing behaviour. One in five SMEs say they have delayed or reduced planned investments in response, highlighting the growing impact on cashflow decisions.
“SMEs are still moving forward, but they’re doing it with less certainty. Costs remain high, and confidence has taken a real step back compared to earlier in the year,” said Beau Bertoli, co-founder and chief revenue officer at Prospa.
“What we’re seeing is a really deliberate approach,” Bertoli continued. “Business owners are making practical decisions to protect cash flow, whether that’s adjusting prices, holding off on investment, or reassessing how they manage upcoming changes like payday super and surcharging.
“The risk isn’t just the rule changes themselves. It’s the gap between awareness and readiness.”
According to the expert, the businesses that plan early, model their cash flow properly and get the right support will be in the strongest position heading into the new financial year.
