Article published 20 December 2021
It’s been a challenging year for many small businesses. A survey by lender OnDeck, shows lockdowns have depleted the cash reserves of one in ten small businesses1. Just two out of five (40%) have the cashflow needed to navigate lockdowns lifting1.
If that sounds like your business, it’s worth knowing there is a solution. The answer could lie with a business loan. And even small sums can give your enterprise a valuable boost.
1 in 3 require $46,000
New research commissioned by Prospa2, found 37% of SMEs require access to funds, with an increase to 56% for businesses that have traded between two to five years. The amount required also increases from an average of $46,000 to $58,000 for SMEs that have traded for less than 5 years."
According to Prospa2, the majority of businesses are looking for additional funds to purchase tools, equipment, or machinery, restock on inventory, or invest in digital software.
The Prospa survey reinforces the importance of capital in a small business, with 87% of respondents saying opportunities may be missed without access to funds2.
Restocking is a must beyond the festive season
While many businesses have been restocking for the busy festive season, the need for cashflow funding could extend well past Christmas.
As OnDeck notes, the pandemic has resulted in significant disruptions to global supply chains1. So, right now, it’s not always about having cashflow in place to score an early payment discount on stock. It’s also about being able to order inventory well in advance given possible delays in procurement1.
With cashflow sorted, businesses can be in a better position to have conversations with alternative suppliers – just in case their regular supplier can’t have goods to them on time.
Focus on the business
In a small business environment, access to funds needs to be fast, and not met by delays.
Call your Mortgage Choice broker for expert support sourcing the finance best-suited to your business, while you’re free to focus on keeping the business moving.