Small and medium enterprises (SMEs) across Australia are bracing for a cash flow crisis this holiday season, driven by rising operational costs, inflation, and lingering COVID-19 impacts.
According to ASIC, more than 6,600 businesses entered financial distress in the first half of 2024, and this number is expected to rise during the holiday period.
“Cash flow is the lifeblood of any SME, but many are ill-prepared for seasonal fluctuations,” said Steve Heavey (pictured above), CEO of Asset Based Lending (ABL) and host of Lenders' Lab. “Without proactive financial management, businesses risk entering a crisis they might never recover from.”
Brokers have a unique opportunity to help SMEs address cash flow gaps during this challenging period.
With more than 90% of businesses expected to experience cash flow struggles, brokers can guide clients on managing unpaid invoices, covering costs, and bridging liquidity challenges.
“Brokers are uniquely positioned to provide SMEs with expert guidance on managing cash flow gaps and securing financing options,” Heavey said. “This proactive approach can make the difference between survival and financial collapse.”
One effective strategy is asset-based lending, which allows SMEs to unlock equity in existing assets like idle machinery, vehicles, or inventory. Unlike traditional bank loans, this approach provides fast, flexible funding.
“It’s inefficient to wait weeks for bank approvals when you can unlock the value of your own assets today,” Heavey said. “This method offers businesses the breathing room they need to navigate the holiday season and beyond.”
Brokers can assist SMEs by offering tailored solutions such as:
“Actionable advice is critical,” Heavey said. “Brokers can provide insights that help businesses avoid high-risk debt and enter 2025 on stronger financial footing.”
With the cash flow crunch approaching, brokers who act quickly can position themselves as essential partners to SMEs.
“The opportunity is there for brokers who offer tailored financial solutions,” Heavey said. “By stepping up now, brokers can help SMEs not only survive but thrive beyond the holiday season.”
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