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Update: The Australian and New Zealand operations of Bibby Financial Services were acquired by Scottish Pacific Business Finance in late 2015 to create Australia’s largest non-bank invoice finance specialist. Welcome to our website.

Monday September 19, 2016

SME owners are working up to 80 hour weeks, are losing sleep about cashflow and almost one in four are predicting revenue to decline through to the end of 2016, according to results of the Scottish Pacific SME Growth Index released today.

Since September 2014 Australia’s largest specialist working capital finance provider has engaged specialist research firm East & Partners to conduct six monthly polls of 1200 small to medium enterprise leaders across all states and key industries.

Scottish Pacific CEO Mr Peter Langham said the latest results show that SME confidence has taken a hit despite the resilience of the sector, which according to ABS statistics employs almost half of the 10.7 million Australians in the workforce.

“Over the past two years, SMEs predicting revenue decline have almost doubled (13.2 to 24.2 percent), while those predicting increases have halved their growth forecasts (8.6 to 4 percent),” Mr Langham said.

SMEs predicting positive growth now in minority

For the first time since the Index began, SMEs forecasting positive growth (48.4 percent) are outnumbered by SMEs forecasting negative growth or no change (51.6 percent).

“The current environment is clearly placing pressure on Australia’s small to medium business community,” Mr Langham said.

Cash flow named as top small business concern

“SMEs nominated cash flow as the most stressful element of business. They cited credit conditions as a key barrier to growth. With the Index highlighting that cash flow keeps 72.5 percent of respondents awake at night, it’s crucial for these leaders to find the right funding to support their business,” Mr Langham said.

“Businesses are increasingly looking beyond the banks to fund growth and to help ease cash flow concerns. From this time last year, there has been a 30 percent increase in SME owners planning to fund their growth using a specialist non-bank lender, with one in five now indicating their intention to do so.”

Mr Langham said SME Growth Index surveying took place in July and August, in the aftermath of the Federal Election and UK Brexit referendum. While uncertainty around these events may have influenced some responses, the results were a timely reminder to governments, industry bodies and financial institutions of the importance of having the right regulatory and funding systems in place to stimulate and support the nation’s vital SME sector. 

For full results, download a copy for free here

Click to see more findingsSeptember 2016 Key Results – Scottish Pacific SME Growth Index

Business confidence dips – Round Five of the Scottish Pacific SME Growth Index reveals the largest round-on-round and year-on-year percentage changes since reporting began in September 2014. 48.4 percent of SMEs forecast growth in revenue, compared with 59.6 percent this time last year. 24.2 percent forecast negative growth, compared with 16.8 percent last year.

Issues keeping SMEs up at night – the top three concerns were cash flow (72.5 percent), not having enough time to get things done (55.2 percent) and customer or supplier issues (39 percent). 17.3 percent were worried about disruption of their business model, and 13.3 percent cited staff issues.

SME owners putting in long hours – A 50+ hour week is standard for most SMEs (88.8 percent). Almost half of SME owners and senior managers (43.7 percent) are spending 60 to 80 hours a week working on their business, which equates to 12+ hour days, six days a week.

Double edged sword of technology – Almost half of SMEs (44.6 percent) believe mobile and digital technology has had a negative impact on their work/life balance. Only 15.7 percent of small businesses believe it has led to better work hours or flexible working conditions.

New products and services plans on hold – Almost half (48.9 percent) of SMEs report no plans to introduce new products and services during the second half of 2016, up from 33.7 percent a year ago. This may have been influenced by uncertainty following the Federal Election.

Interest in non-bank lending increasing - Since Sept 2014 there has been a steady increase in SMEs looking to borrow from specialist non-bank lenders. This has become more marked in the past year: 19.6 percent plan to fund their growth using a specialist non-bank lender, a 30 percent increase from the figure of 15.1 percent in Sept 2015.

Entrepreneurs still positive – Australians are still keen to start their own business, despite barriers and tough conditions. The Index shows one in 10 SMEs are in start-up phase, a consistent figure since data was first collected in September 2014.

Scottish Pacific Business Finance is part of the Scottish Pacific Group (ASX:SCO) and is the largest specialist provider of working capital solutions for SMEs in Australia and New Zealand. More than 1700 clients in industries including transport, manufacturing, wholesale, import, labour hire and printing benefit from their broad range of trade and debtor finance solutions. Scottish Pacific handles more than $13 billion of invoices each year, providing debtor and trade finance funding exceeding $800 million. Established in 1988, the business has full service bases in Sydney, Melbourne, Perth, Brisbane, Adelaide, Auckland, London and China. Scottish Pacific was awarded 2016, 2015 and 2014 Best Cash Flow Lender by broker publication The Adviser, as voted by brokers, in their annual Non-Bank Lending Awards, and named Best Trade Finance Provider 2015 at the international Trade Finance Global Excellence Awards.

Follow Scottish Pacific Business Finance on Twitter - @ScottishPacific - and on LinkedIn

East & Partners is a leading banking research and advisory firm providing the financial services industry with independent research, analysis and insight on institutional, corporate and SME business banking.

For more information contact:
Kathryn Britt
Cicero Communications
Tel: 0414 661 616

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