Half of small businesses report decreased inventory and reduced cash flow
Over 50% of small businesses don’t have the stock to capitalize on Australia’s reopening, while 44% experience impacted cash flow.
New research released by business lender OnDeck Australia has suggested that about half of the country’s small businesses lack the inventory to take advantage of post-foreclosure Australia, and nearly half report cash flow impacted by COVID-19 regulations.
According to data, which was collected by Octopus Group from 300 Australian owners of small and medium-sized enterprises (SMEs) between October 19 and 22, 49% of those surveyed said they had the commercial stock in place “to make the most of the ending [of] confinement”.
About 33% of those polled also noted that they needed additional inventory after the lockdowns were lifted – a figure that rose to 42% when they catered exclusively to small businesses based in Victoria.
However, while the need for additional inventory can be seen as a positive, the same research found that 44% of companies said their cash flow suffered from the bottlenecks.
Other research bolsters this notion of small businesses needing support when Australia reopens, with a survey commissioned by Prospa, released last week, suggesting that 37% of small and medium-sized businesses needed an average of 46,000. $, largely to buy new tools and equipment or to invest in restocking.
Nick Reily, Head of Country Partnerships at OnDeck Australia, said he believes cash flow plays a critical role for small businesses, including in the replenishment process and prepayment discounts, but in the context of COVID-19 and disrupted supply chains, the priority is not reduced costs.
“Businesses today need to be able to act quickly and order inventory well in advance given possible delays in purchasing,” said Mr. Reily.
âWhen companies have the right cash flow funding, they are in a good position to talk to other suppliers if their regular supplier cannot supply them with inventory on time. “
Mr Reily noted that he believed this was a situation in which brokers could be invaluable to small businesses – stating that owners tend to be short on time and are “often unfamiliar with options. of financing beyond their usual bank “.
“Brokers can highlight the availability of more efficient financing choices and manage the application process on behalf of the small business,” added Mr. Reily.
âIt is essential that small businesses act early to have the necessary cash flow. This is a practice that is likely to extend well beyond the end of the lockdowns – and the holiday season.
âThe shock COVID-19 has inflicted on global supply chains will take time to resolve. “
You can read more about writing SME finance in the November edition of The Adviser magazine, available now.
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[Related: Keeping the cash flowing]
Sam Nichols is a reporter for The Adviser and Mortgage Business. His reporting has featured in various media including ABC News, SBS’s The Feed and VICE.