Small businesses reveal what's hurting their recovery

By Katherine O'Chee ·

As small businesses grapple with the uncertainty of operating amid COVID-19, new research shows cashflow remains the biggest barrier to recovery. 

For 1 in 3 small business owners, cashflow sits top of mind as their primary worry, according to figures released by business lender Finstro this week.

This is based on surveys with 1,200 Aussie small businesses in July, just before Victoria’s second pandemic wave worsened. 

Finstro’s chief product officer, Tom Whitworth said these concerns around cashflow reflect the “payments crunch” that many small to medium-sized enterprises (SMEs) face right now. 

That is, there’s a real struggle to balance slow-paying customers with suppliers requesting faster payment times. 

“Suppliers, who are rightly concerned about securing payments in this challenging environment are increasingly demanding shorter trade terms and often cash on delivery,” Whitworth said. 

“This makes it difficult for small businesses who are looking to order supplies and reinvigorate their businesses after a period of significantly reduced trade or shutdown.”

Business loans: A way forward

So, if you’re concerned about your business cashflow what are your options? 

For some SMEs, business loans offer a way forward. They’re a handy way to access extra finance to help kickstart operations again and grow your company in a COVID-safe environment.

But it’s important to note there are many types of business finance and the best one depends on your situation. Read on for a few key options:

Standard business loan

This is a lump sum paid upfront, so generally it suits businesses that have a clear idea of the exact funding they need for purchases like stock or equipment. To cater for different business sizes and purposes, these loans can often range from as little as $5,000 up to $500,000 or more and be borrowed over months or years. 

Right now, accessing this option could also be easier, thanks to the SME Loan Guarantee Scheme. Under this scheme, the government is guaranteeing 50% of unsecured business loans of up to $250,000 issued by eligible lenders, until 30 September 2020 (after that, phase two begins where even larger loans will be guaranteed).

Line of credit

But what if your cashflow is uneven and you can’t predict when or how much you’ll need over the coming months? 

That’s when a line of credit could be helpful, as it’s an ongoing loan facility that you can draw down upon whenever needed. 

The good news is you’ll only be charged interest on the amount you take out. For this reason, a line of credit serves as a great financial safety net, in case further COVID-19 restrictions or challenges disrupt your revenue levels.

Invoice finance

If you’ve got unpaid invoices (or accounts receivables) tying up some of your working capital, then invoice financing could be your go-to. 

With invoice finance, you’ll receive a portion of the invoice amount (usually up to 80-95%) from your lender upfront. Then, once your customer’s payment comes through, the rest of the funds will be released to you - minus interest and any fees. So instead of waiting for weeks for your invoices to come through, invoice finance can give you access to that money almost instantly.

Like a line of credit, this option provides you with a drawdown facility.

Your next steps

Once you’ve figured out which financing option is right for your business, it’s time to weigh up a bunch of other features including interest rates, fees and funding speeds. 

Scroll down below to start comparing deals today, or jump on over to our business loans comparison page for a more comprehensive list.

Page last updated November 28, 2020

Compare business loans - rates updated dailyMozo has robust processes to ensure our site is updated to reflect the latest information from providers. There may be the odd occasion where updates are delayed, so please confirm information before purchasing.

Search promoted business loans below or do a full Mozo database search. Advertiser disclosure.

  • Fully Drawn Loan

    2.95% p.a. variable



  • Invoice Finance

    On Application


    24 hours

  • Hot DealNo repayments on loans for the first 8 weeks (T&Cs apply, offer ends 31st December)

    Business Loan

    Interest rates vary based on risk. Rates range from 14.95% to 24.95% p.a.


    from 24 hours

  • Invoice Finance

    from 6.00% p.a.

    On Application

    from 24 hours

  • Business Loan

    On Application


    48 Hours


^See information about the Mozo Experts Choice Business Loans Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Katherine O'Chee
Money writer

Katherine O’Chee is Mozo’s international money transfer and forex expert and business banking writer. She keeps Mozo’s readers on top of the latest news and writes in-depth features to inform and help Australians make smarter financial decisions. Her work has been published in major media outlets including Sydney Morning Herald, SBS News and Bangkok Post. She has a Bachelor of Arts (Media and Communications) from the University of Sydney.