- 58 per cent of Australia’s 2.3 million small businesses are likely to have experienced disruption over the Christmas/New Year period, with catastrophic bushfires and crippling droughts aggravating business interruptions.
- One in four of Australian small businesses has been rejected for finance by a bank. Of these, 33 per cent will seek financial support from a family member instead.
- January is traditionally a period when personal finances are thinly stretched. Australians spent an estimated $28 billion on credit cards in December.
Leading online small business lender OnDeck is urging business owners not to pin their hopes on the support of family members or turn to personal credit cards this January to meet the cash flow needs of their small business or to clear debt but seek out alternative lending options instead.
Research by OnDeck confirms that 58 per cent of Australia’s 2.3 million small businesses may have experienced disruption as a result of the Christmas/New Year holiday period. OnDeck suggests many small businesses are struggling with debt as the recent bushfires and prolonged drought are having a negative impact on consumer confidence and trading conditions.
OnDeck reports cash flow challenges are increasing for many businesses. Small businesses owners who would usually rely on personal finance to bridge the gap are coming up short. Meanwhile, gaining access to finance from traditional financial sources is becoming increasingly difficult, with one in four businesses having their applications rejected.
OnDeck suggests business owners should explore alternative lending options if they need access to finance fast.
Cameron Poolman, CEO of OnDeck Australia, said, “We know that many small business owners turn to family and friends or personal credit cards when they’re rejected for finance by mainstream banks. However, they may find that both avenues are fruitless at this time of year. For many Australians, the New Year sees a tighter focus on their personal finances as they recover from higher spending throughout the festive season.”
According to OnDeck, Australians spent an estimated $28 billion on credit cards in December, and 37 per cent of cardholders, equivalent to 7.2 million people, expect to still be repaying their Christmas debt through 2020.
“We know that access to capital is the single biggest factor holding small business back in Australia. SME owners who partner with online lenders such as OnDeck may be able to source the funds they need to take advantage of timely opportunities for business growth. This also helps to preserve the important line between business assets and liabilities, and personal financial resources,” concluded Poolman.