SMEs are major contributors to Australia’s economy. With over 2 million small and medium-sized businesses in Australia employing more than 7 million people, SMEs make up 60% of the country’s workforce, according to Kate Carnell, CEO of the Australian Chamber of Commerce and Industry (ACCI).
Based on a study conducted by RSMBird Cameron, there is a steady improvement in business growth for SMEs, with more of them stating that their major barriers to growth are looking for skilled workers and managing time instead of searching for opportunities. Business owners are also focused on evolving and embracing new business practices to achieve the growth that will increase their profit.
Challenges Faced by Australian SMEs
Excessive costs and time involved in complying with government regulations are affecting the productivity of Australian SMEs, consequently harming their business profitability. This red tape poses as a major challenge for smaller businesses as compliance costs are more than 10 times higher for SMEs than larger businesses, according to the ACCI chief.
Australia’s tax and finance systems are also another concern, with their complexities making them impossible for most small business owners to understand and comply with, so they end up employing specialists who just add to unnecessary costs and time. The ACCI chief also adds that easing the tax burden is ideal to make matters simple for SME owners.
Brighter Future Ahead for SMEs
The inherent price inefficiencies in the present bank lending practices have led to alternative lending firms becoming a better option for SMEs, providing a more cost-effective funding solution. This new financial platform offers a business-friendly alternative to SMEs, which borrow roughly $73 billion annually to finance their operations.
Through alternative lending, SMEs are able to have the capital they need to attain sustainable growth. Aside from the less complicated application process and the quick approvals, it is the flexible repayment terms and fast funding that make alternative lending ideal for SMEs. There are no interest rates and monthly payments to settle; for cash advances there is only a fixed percentage to sales is applied every time a credit card payment is settled.
Options like these are and will continue to be of help to SMEs. More SMEs are getting involved in the alternative lending space now than ever, which is forecasted to grow and thrive in the years to come.