More than half of Australia’s small and medium enterprises (SMEs) were predicting positive revenue growth in the six month period to October 2022, a 6% increase in confidence over the same period last year.
The upbeat forecasts were captured in the latest round of the SME Growth Index by ScotPac, Australia’s leading non-bank business lender, following the easing of COVID travel restrictions earlier this year.
In a strong sign of returning business belief:
- The average projected growth rate was 5-6% – up 37% year on year.
- 12% of SMEs identified as being in start-up phase – a 24% jump in new entrants over the previous year.
But not all SMEs were predicting a business bounce, with one in four stating revenue was likely to decline by an average of 7% to October – the worst growth forecast in the history of the SME Growth Index.
Continuing the ‘boom or bust’ theme, revenue growth forecasts from the 700 plus businesses surveyed varied considerably – from +10% to -17%.
ScotPac CEO, Jon Sutton, said the mixed forecasts were reflective of the uneven impacts of the pandemic and ongoing economic challenges, including a 6.1% inflation rate.
“There is no doubt some sectors have been hit harder than others by skilled labour shortages, supply chain delays and rising input costs, particularly the building, retail and hospitality sectors.” Mr Sutton said.
“But the fact that most businesses are projecting a growth in revenue, coupled with the large number of start-ups in the past 12 months, is a great reflection of the resilience of Australia’s SME sector.
“ScotPac has been assisting business owners at all stages of their growth and all points of the economic cycle for more than 30 years.
“From start-ups looking to build steadily from a small base, to established businesses seeking to diversify, we have the breadth of product to help more businesses in more situations than any other non-bank lender.”
Mr Sutton highlighted two examples of ScotPac customers who had thrived in the past two years and were accessing business finance to fund further growth.
- A transport company that has doubled its revenue since 2020 has a ScotPac working capital facility with a $1.5 million limit to help cash flow continued growth. It has a separate asset finance facility to assist with fleet expansion to meet demand.
- A wholesale business that has also experienced significant growth since 2020 has a ScotPac invoice finance facility with a circa $700,000 limit to provide working capital.
ScotPac’s bi-annual SME Growth Index, is Australia’s longest running research report on small business sentiment towards growth prospects.
The full report, which is scheduled for release in September incorporates feedback from 700 plus industry participants on topics encompassing revenue forecasts and profit expectations, cashflow management practices, and growth financing intentions. It is a comprehensive temperature check of a sector responsible for employing millions of Australians.
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 more than 30 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.
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