Businesses with an annual turnover of less than $200,000 have fared better than their larger peers during the COVID-19 crisis, according to new research.
According to a survey of over 300 business owners from SME lender OnDeck Australia – which involved a survey of over 300 business owners – 83 per cent of small businesses with an annual turnover below $200,000 have been impacted by the COVID-19 crisis.
This compares with 90 per cent of businesses with an annual turnover above $200,000.
OnDeck stated that these results mirror findings from past events, with less than half (49 per cent) of businesses with turnover of less than $200,000 noting they were impacted by climate and weather-related events such as bushfires, compared with 65 per cent of larger businesses.
Moreover, 47 per cent of small businesses with turnover below $200,000 said they were impacted by past political events such as elections, compared with 65 per cent of businesses with higher annual turnover.
Reflecting on the findings, Robbie Fidler, national broker channel manager, OnDeck Australia, observed: “This greater resilience reflects the ability of smaller enterprises to act fast, engage in a more nimble response, and explore new sources of revenue.
“As a small-business lender, OnDeck has seen many business owners across Australia take this unsettling time in their stride.
“The ingenuity of small-business owners, who have pivoted their expertise into new opportunities, is remarkable.”
Funding still a barrier for SMEs
OnDeck also reported that 52 per cent of businesses with an annual turnover below $200,000 said access to cash flow finance would help them better absorb the impact of COVID-19.
OnDeck found that 28 per cent of smaller businesses have sought a bank loan in the past, compared with 60 per cent of SMEs with turnover above $200,000.
“Our research confirmed that smaller businesses can be more likely to resort to informal lines of funding to keep the venture afloat,” Mr Fidler added.
“When knocked for a bank loan, 42 per cent of small businesses reach out to family and friends for finance. One in three will resort to using their personal credit card to fund business needs.”
“It always makes good business sense to keep business finance separate from personal finances.”
Mr Fidler concluded: “So it is important for businesses with turnover below $200,000 to know that funding options are available.”
[Related: New SME grants launched]