Two-thirds of small business owners feel stressed during the holiday period, largely due to cash flow problems, which brokers can help alleviate, SME lender Prospa has said.
According to a broker poll conducted by non-bank business lender Prospa during its Future proof your business: How to help SMEs avoid common business funding traps webinar, managing cash flow is considered the major reason that SMEs seek out business finance solutions, with 53 per cent of brokers stating so.
Other reasons include finance for buying or upgrading equipment (20 per cent), business expansion (12 per cent) and meeting BAS or ATO debt (10 per cent).
Prospa's head of partnerships, Alex Brgudac, has now called on brokers to be proactive and prepare SMEs for any potential cash flow fluctuations during the holiday period.
“Staying on top of cash flow is a tough but essential part of running a small business, especially in the lead up to the holiday season,” Mr Brgudac said.
“Depending on factors like industry, location and customer habits, this time of year can be a business boom or tumbleweeds for SME clients – but both scenarios come with cash flow pressures.
“Prospa research has shown that two-thirds of small business owners feel stressed during the holiday period because of cash flow problems.”
The SME lender highlighted the ways in which different businesses across different industries might experience varied cash flow during this holiday period.
While hospitality and tourism businesses gear up for their busy season, and retailers purchase extra stock for pre-Christmas sales, professional CBD SMEs might feel a cash flow ‘squeeze’ due to office closures and subdued demand.
Mr Brgudac said that Prospa has already seen these trends in action, and encouraged brokers to reach out now to help their small business clients prepare.
“Brokers need to be aware that small businesses face different cash flow pressures during this time,” he said.
“Now is the time to be talking to your small business clients about their specific funding needs and the solutions available to them.”
[Related: Broker sentiment on the rise]
Hannah Dowling is a journalist for The Adviser and Mortgage Business.
Prior to joining Momentum Media, Hannah worked as a content producer for a podcast catering to property investors. She also spent six years working in the real estate sector at a local agency.
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