Is your small business owed money? Chances are, it is…
A recent report released by the Invoice Market indicates Australia’s two million small businesses are owed around $76 billion worth of outstanding invoices – that’s an average of $38,000 each!
Fixing this problem, although a staggering proposition, could create up to half a million jobs – nearly entirely resolving Australia’s unemployment woes.
The problem, of course, isn’t that Australian businesses are each owed about $38,000 – it’s that they are perpetually owed these relatively large sums of money. Debtors are often asked multiple times for payment, too – up to five times – which in turn adds both a time and admin ‘hidden’ cost to the recoup amount.
When cash flow issues are this serious, the flow-on effect is equally dire. More than a third of Australian SMEs have had to dip into their personal savings to manage their business’ cash flow, which impacts their personal expenses such as housing and other living costs. Of course in such a scenario, a business owner is unlikely to hire new staff, and it can even be difficult to pay existing staff members. Unsurprisingly, small businesses are amongst the tardiest in paying their bills to other SMEs – another flow-on effect.
As small businesses employ around 70% of the Australian workforce, the collective impact of this situation becomes enormous.
What can be done about it?
Spotcap has been championing the cause of accessible finance to Australian SMEs since our launch in the country in early 2015. The banks are typically reluctant to lend to small businesses, seeing small business as high-risk.
We have helped fill a niche in the market by providing fast, flexible finance to those entities. Whilst not all types of finance will be right, there is plenty of useful information on alternative finance options, so you can find out what might suit you and your situation. For more information on how Spotcap could be your financial solution, read about how it all works.
We hope to be at the forefront of this fight on behalf of Australian businesses. Not only that, but we are confident that in time, this astronomical debt will decrease, as SMEs realise they can now access the funding they need to continue to grow.
The cash flow crisis is real, but with any luck, it’s not here to stay.
Originally published March 15 2017 , updated April 27 2017