Hiring challenges and staff shortages have been identified as the major roadblock to small and medium enterprises (SMEs) reaching their revenue targets in 2022.

According to the latest round of the SME Growth Index report by Australia’s leading non-bank business lender, ScotPac, just under half of the 700 plus SMEs surveyed (46%) are on track to hit their business targets for this year.

However, two in five (40%) of those businesses projecting a revenue shortfall have nominated staff shortages as a major contributing factor. Larger SMEs were the most affected, with 48% of those with revenues between A$5m-$20m impacted by gaps in our workforce related to COVID-19 border restrictions.

Another leading factor for underperforming SMEs was working capital constraints, with a third of businesses stating poor access to finance was holding them back from reaching their revenue targets. This was highlighted by lengthy loan approval times reported by Australian SMEs, with the average now stretching beyond a month to 35 days.

Rounding out the top 5 reasons preventing SMEs from reaching their financial targets in 2022 are:

  • COVID restrictions / prevention measures – 28% said these had or were continuing to impact revenue, along with associated issue of depressed demand for services or products (25%)
  • Supply chain issues – 18% of businesses impacted, particularly larger SMEs
  • Difficulty accessing grants – 18% have been hampered by issues associated with qualifying for government grants and support programs, including the SME Loan Recovery Scheme.

Of interest, 6% of SMEs said poor execution stopped them achieving revenue targets, and 11% said they just didn’t have enough time in the day.

ScotPac CEO, Jon Sutton, said the findings showed that many SMEs are still in recovery mode and looking for solutions after two years of economic disruptions. ‘This report reinforces the fact that many SMEs need support, including fast access to working capital, as they continue to recover from the far reaching impacts of COVID-19,’ Mr Sutton said.

‘ScotPac implemented several initiatives to make it easier and less stressful for businesses to access working capital during the pandemic.

‘We understand that fast and flexible access to finance is critical for SMEs looking to reinvest in their businesses post COVID, particularly those recovering from labour shortages and supply chain issues.’

Mr Sutton said ScotPac’s range of finance options included Finance applications for some ScotPac products which can take as little as 10 minutes to complete, and in some cases funding can be approved in 24 hours.

ScotPac has a number of handy guides for small businesses and advisors that are packed with information about our products, including the Business Funding Guide and Fits ME, Essential Guide to Business Funding.

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.

 

For more information contact:

Todd Hayward
Mob: 0412 205 151
todd@telamon.com.au

Martin Cole
Mob: 0403 332 977
martin.cole@capitalmarketscommunications.com.au