Australian SMEs with annual revenue up to $5 million are three times more likely to tap into personal finance facilities like credit cards to manage rising business costs than larger SMEs with revenues of between $5 million to $20 million.

However, the overall use of personal finance facilities to fund business costs has fallen sharply in the past seven years with 47% of SMEs reporting they never used personal finance sources for business purposes, compared to just 12% in 2016.

The findings are contained in the latest round (Q1, 2023) of the bi-annual SME Growth Index by ScotPac, Australia’s leading non-bank business lender. Related insights from the SME Growth Index Report include:

  • 33% of small SME owners reported ‘occasionally or infrequently’ using a personal finance facility to support their business, compared to 19% for large SMEs.
  • 24% of small SME owners never use their personal finance facilities to support their business, compared to 75% for large SMEs.
  • Small SMEs (35%) are five times more likely to consider a drawdown in equity compared to large SMEs (7%) to help manage rising prices.

ScotPac CEO, Jon Sutton, said the figures showed that more needed to be done to make small SME owners aware of alternatives to personal finance facilities.

“The large recent drop in the use of personal finance for business costs is a good sign but there are still too many SME owners mixing their personal and business finances,” Mr Sutton said.

“While larger SMEs historically had access to a broader range debt funding sources than smaller businesses, there are now a host of tailored and accessible non-bank finance products to support most SMEs in most situations.

“These include invoice finance facilities that provide working capital while SMEs are waiting for client payments, and online business loans that can see funds approved and dispensed in as little as 24 hours.”

Mr Sutton encouraged all SME owners to consult their broker or advisors about ScotPac finance options.

“There is an outdated perception that access to new business finance or to refinance an existing facility is too hard for small SMEs,”Mr Sutton said.

“ScotPac has the most flexible range of SME finance products in the market and the scale to deliver cost-effective solutions across a breadth of industries and business situations.

“Over 35 years of operation we have become a trusted partner to thousands of SMEs large and small, and our team are there to support business owners every step of the way.

“So, before tapping into a personal finance facility, small business owners should be tapping their broker on the shoulder for advice,” Mr Sutton said.


About the SME Growth Index

ScotPac’s bi-annual SME Growth Index, is Australia’s longest running research report on SME sentiment towards revenue growth prospects.

The Round 18 research was conducted by East & Partners who interviewed 720 SME enterprises with annual revenues of A$1-20 million in February 2023.

SMEs surveyed have operated continuously for 14.2 years and manage an average of 59 full time employees.

Sectors represented in the survey included Manufacturing (14%), Property & Business Services (14%), Retail (11%), Wholesale (11%), Personal / Other Services (10%), Construction (10%) and other industries including Transport & Storage, Mining, Agriculture, Media, Hospitality, Finance & Insurance (non-bank) and Electricity.

ScotPac is Australia and New Zealand’s largest non-bank SME business lender, providing funding to small, medium and large businesses from start-ups to enterprises exceeding $1 billion revenues. For 35 years ScotPac has helped thousands of business owners succeed, offering fast and flexible funding. From simple to complex, small to large, start up, growth or turnaround – ScotPac can help with a range of funding from Invoice, Trade or Asset Finance to Home Loans and Business Loans.

For more information contact:

Todd Hayward

Mob: 0412 205 151