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Most SMEs point to this factor as critical to their recovery

Adrian Flores
Adrian Flores
24 July 2020 1 minute readShare
SMEs recovery

A majority of small to medium businesses have pointed to one crucial factor as a leading driver of their work towards recovery, according to a recent survey.

Research from SME lender OnDeck Australia found that 57 per cent of SMEs say access to cash flow will help them recover from the COVID-19 pandemic.

It found 69 per cent of SMEs with six to 49 employees say cash flow is the main factor behind their recovery, compared with 49 per cent of sole traders.

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Further, 62 per cent of SMEs with annual turnover above $200,000 believe cash flow is critical to recovery, compared with 52 per cent of businesses with turnover below $200,000.

OnDeck Australia national broker channel manager Robbie Fidler said the findings demonstrate that Australia’s small-business community may win the battle for survival against COVID-19, but without the cash flow to rebuild, many could lose the peace.

 

“We know that many SME owners around the country have trimmed business expenses to a bare minimum. But that is a survival strategy — not a recovery plan,” Mr Fidler said.

“As we head towards spring and the upcoming festive season, businesses need to be able to pick up steam for what is traditionally the peak trading period of the year, and this demands access to cash flow.

“To this end, we applaud the government for extending JobKeeper payments until the end of March and the extension of the Coronavirus SME Guarantee Scheme until June, which allows SMEs access to $1 million in secured funding that will enable them to adapt and innovate during the coronavirus crisis.”

The findings from OnDeck Australia mirror comments from Scottish Pacific chief executive Peter Langham, who said protecting cash flow, alongside securing business finance, should be two non-negotiable issues part of every business contingency plan moving into the second half of 2020.

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“Having a cash-flow buffer helps a business ride out tough times, and also allows business owners to move quickly if they see an opportunity,” Mr Langham said.

Most SMEs point to this factor as critical to their recovery
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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