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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.

Our Scottish Pacific SME Growth Index is a twice-yearly snapshot of Australia's small to medium sized business sectors showing cashflow issues that many businesses face today, below is the first of six key insights found in our March 2018 report:

SMEs expecting growth but opportunity lost

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Half of the SMEs surveyed forecast positive growth revenue for 2018, estimating on average a 4.3% revenue increase.

The 50.2% of Australia’s SMEs forecasting positive growth revenue is the highest since the March 2016 Scottish Pacific SME Growth Index (but well short of the high of 62% in September 2014).

However, nine out of 10 SMEs (92.7%) indicated that problems with cash flow prevented them from generating more revenue in the past 12 months.

One in five SMEs (21.1%) said they were unable to take on new work because of cash flow restrictions.

These findings highlight the fundamental role that effective cash flow management plays in driving business growth.

When asked how much additional revenue could have been generated over the previous 12 months had cash flow been better, only 7.3% responded that better cash flow would not have led to more revenue.

Almost a quarter said they could have grown revenue between 10% and 25% with better cash flow, around a third said revenue could have been improved between 5% and 10% and almost one in five indicated growth of up to 5%.

This foregone revenue represents, according to East & Partners analysis, $A229.8 billion in lost potential revenue. This is based on ABS data that total revenue for the $A1-20m SME segment is $A1.4 trillion, and on 1161 of 1253 SME Index respondents indicating that better cash flow could have improved their revenue by an average of 11.7%.

Yet 43.5% of SMEs reported they are not using or considering non-bank lending options to improve their access to finance.

Companies reported that issues regarding cash flow and security of cash flow were a key potential barrier to growth, with 41% of respondents noting their concern, higher even than concerns about government policies (37.4%).

This round, SMEs’ positive revenue forecasts for the first half of 2018 ranged from 1.4% to 5.7% and averaged out at 4.3%.

Given the findings regarding the impact of cash flow on potential revenue, those forecasts could be higher if cash flow concerns were dealt with adequately.

One in four SMEs (25.4%) forecast negative growth, on average dipping by 6.4% - the highest average negative growth forecast since the Index began in 2014.

Like to know more? To download the latest copy of our SME Growth Index, click here.

Our next release will be available in September 2018 and will be available on our website.

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