According to the latest data from the ABS more businesses are having troubles with their cash flow. We share an extract from MyBusiness below.
The latest ABS Business Conditions and Sentiments Survey showed that, in February 2021, for 41 percent of businesses, cash on hand would cover less than three months of business operations, compared to 29 percent in October and June 2020.
“Businesses provided comments on the COVID-19 restrictions impacting them. International and domestic border restrictions, capacity limits, and increased cleaning requirements were highlighted as concerns,” said ABS head of industry statistics John Shepherd.
Responding to the figures, CreditorWatch Chief Economist Harley Dale said it is “a little like the good, the bad and the ugly”.
“… as our economy continues to rebound, consumers are all cashed up and ready to spend, putting businesses in a good position to undo some of the negative effects associated with the pandemic,” Mr Dale said.
“We’re seeing the continuation of some troubling statistics. Thirty percent of businesses reported cash flow as an inhibiting factor to their operations. While less than half the figure found in April 2020 (72 percent), this is still far too high and reminds us we have a long way to go in what is still a nascent ‘COVID recovery.”
“The data reveals 41 percent of businesses could cover less than three months of business operations using cash on hand. Given the enormous weight the SME industry brings to Australia’s economic and social table, this is a worryingly large figure.”
About Us – Nova
If you need assistance with your business cash flow, we offer a reputable invoice factoring facility and are committed to the growth of small and mid-sized businesses. Invoice factoring is a cash flow finance solution that allows businesses to access a large percentage of the funds held in their unpaid sales invoices. Your business can enjoy the benefits of the cash flow of the invoice before your customer pays it.
Most small businesses need a line of credit or overdraft, which can take weeks for approval, to keep operating and enable the business to grow. Invoice factoring is different because you do not have a ‘loan’ as such, and you do not need to secure your funding with property. Your customer invoices act as your security, and approval can be within 24 hours!
If you have any questions reach out to us for an obligation-free chat.
(To read the full article: MyBusiness 2021)