Funding crisis hurting business growth: poll

Small and medium businesses are being forced to shelve growth plans, postpone investment and forgo hardware purchases because of a lack of credit, according to a special poll by SmartCompany for the Finance and Treasury Association ahead of the May Money Expo.

The survey of 155 respondents reveals 71.5% of businesses have found it more difficult to get credit from lenders in the past six months.

This is having a severe impact on their business, with just over a quarter saying that credit problems had forced them to lay off staff.

A lack of lending has also forced 57% to shelve investment plans, 53% to abandon hardware purchases, and 50% to postpone growth plans.

And it’s not just bad businesses that are finding the banks are scrutinising their business – the poll reveals about 45% of respondents have had their loan rate or conditions reviewed in the past six months.

The other great challenge confronting business owners in the current environment is cashflow, with almost 58% of respondents reporting that customers are taking longer to pay their bills.

Just over 43% of those surveyed said their business is currently battling cashflow problems, with 40% of respondents reporting that cashflow problems are affecting their home/personal life.

Yet despite this obvious challenge, just 28.6% of those surveyed said they had sought assistance from debt collection agencies.

But the SmartCompany poll does contain one bit of good news – despite the difficult economic environment, more than 70% of respondents have not reduced dividends in the past six months and have no intention to do so.

Do you have more questions about cashflow, investment and financing? Then don’t miss the May Money Expo, to be held in Melbourne on 26 May and in Sydney on 28 May. There will be a range of experts on hand to answer your questions – and a special appearance by Aunty B.