- 83 per cent of business owners concerned about state of economy
- One in three believe government policies have little impact on small businesses
- Only a third of business owners made use of the instant asset write off due to lack of finance.
Despite increasing business confidence, the August 2019 Sensis Business Index has revealed Australia’s small business owners remain concerned by a lack of access to finance.
The ability to secure funds is inhibiting business growth and is proving to be one of the biggest challenges faced by small business owners. One in three business owners believe the economy is at a standstill. Although, 22 per cent of businesses expect an improvement in the economy over the next 12 months while 30 per cent believe the situation will get worse.
Still, just over half (57 per cent) of business owners say they are now confident in their prospects for the next year. Tasmanian business owners are the most confident with 63 per cent of businesses expressing confidence in their prospects, just higher than Queensland at 60 per cent and Victoria at 58 per cent.
Commenting on findings Sensis CEO John Allan said it’s great to see more than half of small and medium businesses across the nation feeling upbeat about their business outlook post-election. Although the results did raise concerns over the effectiveness of the government’s small business initiatives.
“Over the years we have seen a growing perception among SMBs that Federal Government policies do not affect them and our latest index further cements this,” said Allan.
Less than one in three Australian small businesses applied for the $30,000 instant asset write-off introduced by the Federal Government this year, citing lack of funds and spending as a deterrent.
Two industries that took advantage of the scheme were the manufacturing and building industries.
At the state level, only one in five Australian small businesses believe that state policies are supportive of small business with ACT leading the pack, followed by Tasmania and NSW.
Across the country, 37 per cent of businesses believe excessive ‘red tape’ is holding back their growth. This was highest in Victoria with 41 per cent of businesses quoting red tape as an issue. In NSW, 35 per cent of businesses view insurance as the second highest hindrance after red tape (36 per cent), while 37 per cent of South Australian and Tasmanian businesses believe insurance is putting the brakes on their growth. Interestingly when pressed further as to what red tape specifically, few business owners and managers could name specific examples.
Access to finance remains the most significant issue for Australia’s small and medium businesses. The index found that 30 per cent of business owners and managers believe it is harder to access finance than it was six months ago.
Access is most difficult in regional areas with 37 per cent reporting it is harder than it was six months ago to access finance and 52 per cent reporting there has been no change.
A quarter of businesses are using credit cards to access finance, and more than one in five are increasing their overdraft facilities.