Cashflow challenges top SME concerns

  • By Christine St Anne

Businesses are wanting to invest but are concerned about their cashflow, which is impacting their decisions to expand, according to latest industry research. 

RFi Group’s latest Australian SME Banking report surveyed 501 businesses with 52 per cent indicating high concerns with their cashflow. 

RFi Group’s survey highlights that there is a growing confidence among SMEs. 

These businesses have a high confidence about the future over the coming 12 months.

However, the bulk of SMEs surveyed are concerned with cashflow pressures which are holding back their decision to invest in future business opportunities such as investing in digital, technology or expansion. 

The survey revealed that 52 per cent of SMEs are concerned about their cash flow which importantly did not change since the survey was done in the September quarter of 2020. 

Other challenges also include access to funding, maintain margins and government and compliance issues . 

The data also revealed that a significant number of SMEs are intending to take out a borrowing product in the next 12 months. 

It is here that lenders can play a role. 

The RFi Group data revealed that 45 per cent of SMEs concerned with their cash flow would like their bank to provide them support with access to more short-term credit. 

At the same time, SMEs as well as bigger firms are also eyeing alternative lenders with the data revealing that 33 percent of SMEs with a turnover of $2.5 million or over are highly likely to consider an alternative lender, up 7 per cent since the September 2020 quarter. 

"Until recently, alternative lenders have generally targeted, and been associated with, addressing the needs of smaller SMEs - those who may struggle to meet the credit checks and corollary requirements of a traditional provider, but who nonetheless require capital," RFi Group research analyst Anna Emsley said. 

"Our research has found that there has been a  significant rise in the number of bigger SMEs – not a target for alternative lenders nor an ‘expected’ potential customer – now starting to also consider alternative lenders," Emsley said.

"The increasing number of bigger businesses expressing high consideration for alternative lending speaks to their credit cravings, unmet needs, and their intentions for the future – these businesses are itching to expand, to invest in digital technology and to move beyond the COVID malaise that plagued 2020."