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2 in 3 Aussie SMEs impacted by bushfires

Maja Garaca Djurdjevic
Maja Garaca Djurdjevic
02 March 2020 2 minute readShare
Bushfires

Two-thirds of Aussie SMEs have been directly or indirectly impacted by the devastating bushfires that raged across Australia this summer, according to NAB’s latest research, with the impacts expected to linger over the next three months.

Following a survey of 500 Australian SMEs, NAB revealed that two in three indicated their businesses have been directly or indirectly impacted by the bushfires, with 7 per cent reporting “significant” impact.

Not surprisingly, 70 per cent of small business said the fires would continue impacting their business over the next three months.

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NAB chief customer officer business and private banking Anthony Healy said that the bank’s findings suggest many families and businesses face an uncertain future.

“Business owners have also shared the physical and mental health impact of the bushfires, including describing the unsettling effects of having to send employees home and sending customers away due to poor air quality,” Mr Healy said.

 

NAB further found that almost one in two SMEs impacted by bushfires has suffered temporary disruptions, with the next most common impact coming from higher costs such as insurance, lower customer confidence and disruption to travel or tourism.

Around 17 per cent of firms closed their business, but this reached 24 per cent in vulnerable bushfire areas. The most “significant” impact on their business was a reduction in cash flows, loss of customers and disruption to suppliers, according to around three in 10 SMEs.

As for the expected duration of the impacts, while bushfire conditions have now improved, around seven in 10 SMEs expect the fires to continue to hinder their business in some way in the next three months, and just over six in 10 in the next 12 months. But, NAB pointed out, these numbers rise significantly for SMEs in vulnerable bushfire areas.

By industry, the highest number who expect to be “significantly” impacted in the next three months are in transport/storage, utilities and construction, but manufacturing (14 per cent) and agriculture (11 per cent) firms expect to be hardest hit in 12 months’ time.

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Cash grants sought

In welcoming the government’s National Bushfire Recovery Agency and the $2 billion recovery fund, Mr Healy noted that the banks will be working with the government to address the needs of the suffering businesses.

“Regional businesses and agribusinesses are incredibly resilient, and government and banks are working together to help them through this,” Mr Healy said.

“Our bankers will continue to visit businesses and regional communities over the coming weeks to assess requirements and provide support. We encourage all of our NAB customers to contact their local banker as we are ready to assist,” Mr Healy said.

He revealed that one in four impacted SMEs told NAB they were planning to take up the government’s $500,000 loan offer, although a further one in four were unsure at this stage.

Take-up is expected to be much higher in vulnerable bushfire areas, in NSW and in major capital cities. By industry, take-up is expected to be highest in mining, telecoms and accommodations, cafés, restaurants and clubs.

Interestingly, around three in four SMEs believe the loan could help their business offset some of the bushfire impacts.

When asked what governments should do to most help businesses impacted by the bushfires, around six in 10 said cash grants would help most, and five in 10 said interest free or reduced rate loans for the life of the loan, and greater investment in infrastructure and other community assets.

2 in 3 Aussie SMEs impacted by bushfires
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Maja Garaca Djurdjevic
Maja Garaca Djurdjevic

Maja Garaca Djurdjevic is the editor of My Business. 

Maja has a decade-long career in journalism across finance, business and politics. Now a well-versed reporter in the SME and accounting arena, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies and enabling citizens to influence decision-making.

You can email Maja on [email protected] 

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