Recently published research has revealed that a large percentage of Australian SMEs are struggling with their cashflow as a result of the ongoing covid-19 pandemic.

The survey that included data from over 900 commercial financial brokers showed that even before the latest lockdowns in NSW and Victoria came into full effect close to 77 percent of their SME clients admitted that their cashflow had deteriorated significantly since the first half of 2021.

When being surveyed about the drivers of the cashflow related problems, 77 percent answered that it was invoice-related, of which 27 percent related to the imposition of longer trading terms.

The data recorded by the survey also discovered that 44 percent of all SMEs were unaware of alternative funding sources being available to help them with cashflow related business challenges.

Industries such as infrastructure, mining and construction might be generally better off when compared to other sectors of the economy however, many of small SME suppliers also supply sectors that are struggling significantly. For these SMEs, the prompt payment of invoices is become more and more essential.

There are plenty of businesses who are seemingly healthy and well managed, and who have lucrative contracts with government and some of Australia’s largest companies, but these might go to waste simply because they can’t afford to wait three months after the work has completed to be paid.

Australia Is Experiencing an Increase in New Businesses Starting Despite Challenges of Covid-19

Newly published data collected by the Australian Bureau of Statistics (ABS) shows that there is an increase in the number of Australian businesses that are starting up, despite the tough restrictions, ongoing lockdowns and economic uncertainty that has been generated as a result of the covid-19 pandemic.

The recently published data from the ABS, which counts the number of Australian businesses, found that in 2020–21, illustrates that there was a 3.8 percent increase in the number of businesses. This included a 15.8 percent entry rate and 12 percent exit rate.

The number of new businesses which began operating in 2020–21 was 356,480. This number is surprisingly larger than it has been in the past three years. The increase in new businesses is up from a low of 336,499 new businesses in 2019–20. At the same time, there were 277,674 business exits in 2020–21, the lowest it has been in three years, since 2017–18 recorded 273,237 business closures.

NSW Government Expands JobSaver Scheme To Assist More Businesses During Lockdown

The NSW State Government has announced that large hospitality and tourism businesses that have revenues of up to $1 billion are now eligible for JobSaver following the announcement of an extension of the scheme.

The expansion to large businesses in the tourism, hospitality and recreation industries means that businesses who have an annual turnover between $250 million and $500 million receive 40 percent of their weekly payroll at a maximum of $300,000 a week.

Larger businesses who have a turnover between $500 million and $1 billion can anticipate to recieve up to $500,000 each week.

Previously, the JobSaver program had only previously provided eligible businesses with revenues between $75,000 and $250 million with weekly payments of up to $100,000.

The changes to the support package were made a few days after NSW Premier Gladys Berejiklian announced that the Greater Sydney lockdown would be extended until the end of September.

The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)

The following two tabs change content below.

Post Author: Craig Dangar

Leave a Reply