Small businesses expected to hit financial roadblocks before 2024 - can you stay afloat?

By Sara Borman · · 2 min read
Fact Checked
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female small business owner writing in a notebook and working on a laptop using a business loan to stay afloat

A study by Small Business Loans Australia has found that 3 out of 4 small to medium enterprises (SMEs) are expecting to hit cash flow problems before 2024.

Reflecting the rising cost of living and consistent RBA cash rate rises, these problems with cash flow are expected to occur in a range of ways. 30% of small business owners are anticipating more difficulty collecting payments, while 26% were worried about their ability to attract sales - another 20% expressed concern about both of those factors bringing them into financial strife.

Are Aussie small business owners prepared for tough times?

After sticking it out through the changing shopping habits, supply chain troubles, and wavering consumer confidence of a global pandemic, you’d expect any small business to have strategies prepared for financial crisis.

In reality, the cumulative impact of these past few years has made it harder for many businesses to put adequate strategies in place. In fact, this study shows that 44% of small businesses do not have a plan to maintain cash flow.

With more than a third of businesses saying their cash flow expenses are upwards of $50,000 a month, this means that a lot of businesses will have to cut expenses and investments as wallets close.

At a time where investment can help a business stand out and grow effectively, this could be a real set back to customer acquisition and employee retention. 40% of small businesses surveyed said they had delayed investments, while a further 15% planned to cancel theirs.

Can a business loan help you avoid financial crisis?

Founder of Small Business Loans Australia, Alon Rajic, highlights business loans as one potential strategy for SMEs looking to keep their heads above water and grow in spite of difficult times.

“Growth often requires investment. Improving your product or service offering, getting in front of new customers, and customer loyalty will be important for many businesses who want to succeed in these times. For most, it will require financing.” says Rajic.

He notes the importance of exploring your options: “Research and loan comparisons will be important to finding the most suitable and lowest-risk loan. This may include flexibility in repayments and lower fixed interest rates.”

To get you started, we’ve pulled up some options from our database for business loans. However, as Rajic notes, “It is important for SMEs to seek advice from a licensed financial adviser before committing to a loan to ensure they can meet repayments and higher interest rates during periods of reduced cash flow.”

Read our guide on how to apply for a small business loan to find out more. If you’re looking at other modes of finance for your business, explore our hub for business credit cards.

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  • placeholder
    About Great Southern Bank
    Business+ Unsecured Loan

    A simple way to fund your business’s big plans. Borrow up to $50,000 without using your assets as security. A fixed interest rate means your repayments don’t change over the life of the loan. Apply in minutes with the Business app. Enjoy a fast approval process. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 11.95% p.a. to 22.95% p.a.
    $495
    Varies
    Go to site
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  • placeholder
    About Bizcap
    Unsecured Business Loan

    Business Loans from $5,000 to $2,000,000 with high approval rates. Access to funds in as little as 3 hours. Cash flow friendly repayments and open minded offers.

    Interest Rate
    Upfront Fee
    Funding speed
    On Application
    3%, starting at $399
    from 3 hours
    Go to site
    Details
  • placeholder
    About Lumi
    Unsecured Business Loan

    A straightforward business loan with no hidden Lumi fees or charges. Speedy application and approval process with fast access to funds according to Lumi.

    Interest Rate
    Upfront Fee
    Funding speed
    from 9%
    -
    Within same day
    Go to site
    Details
  • placeholder
    About Great Southern Bank
    Business+ Unsecured Overdraft

    Manage the cash flow in your business with ease. Access up to $50,000 without using your assets as security. Lending criteria apply. Access your available limit from your linked Business+ Account. Use your Debit Mastercard for added convenience. Interest is charged on your balance owing, not your limit. Easy online application. $495 establishment fee.

    Interest Rate
    Upfront Fee
    Funding speed
    Rates range from 14.95% p.a. to 25.95% p.a.
    $495
    Varies
    Go to site
    Details

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