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Warning to SMEs: payment times have completely blown out

Small businesses are receiving payments from clients a month late on average – that’s 18 days longer than last year. Make sure your business’s cash flow isn’t adversely impacted this holiday season.

The blow-out in payment times is having a “devastating impact” on small businesses across the country, warns the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).

In October, small businesses were paid 31 days late on average, compared to 13 days late in October 2019, reveals CreditorWatch data published in a recent report.

ASBFEO Kate Carnell says the delay in payments is hitting businesses already under strain due to COVID-19.

“It’s more important than ever to remember that although Small Business Counts is a statistical report, behind every number is a person,” she says.

“Small businesses are the engine room of the Australian economy, but they are also hard-working people who have had to overcome huge obstacles in 2020.”

What businesses are worst impacted?

The transport, postal and warehousing sector has been hit hardest by the blowout in payment times, with those businesses receiving payments an average of 90 days late, compared to 9 days late in October 2019.

Other sectors with average payment delays of over 30 days include:

– financial and insurance services

– professional, scientific and technical services

– construction

– rental, hiring and real estate services

– healthcare and social assistance businesses, and

– many other service-based businesses.

It’s doubtful these figures will improve over the next couple of months, with the summer holidays a notorious period for late payments.

So if you haven’t started invoicing clients yet, you should consider doing so now – especially those who have a history of being tardy.

Silver linings in 2020

It’s worth noting that the ASBFEO report isn’t all bad news.

It also highlights the resilience and agility of Australian small businesses.

It shows 40% of small businesses have pivoted their operations to adapt to the rapidly changing conditions faced in 2020 – whether that be due to the summer bushfires or COVID-19.

“It’s been inspiring to hear the stories of small businesses that made a decade’s worth of change in a matter of days and managed to keep their business afloat,” says Ms Carnell.

Funding options are available

If your business is struggling with cash flow issues due to late payments from clients, or a recent change in direction, then please get in touch sooner rather than later.

We can run you through some financing solutions that may be available to help your business make the transition from 2020 (good riddance!) to 2021 (here we come!).

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Make it happen

The staff at MAKE Finance Group are experienced and dedicated to providing our clients with exceptional levels of advice and service.

As a full service finance broker, we can save you time and stress as we negotiate with Banks and Financiers on your behalf. Whether it is asset or equipment finance, business finance and advice or even a home loan, we will go to the market on your behalf and find the best possible deal available.

Let us worry about the financials, as we make it happen for you.

Why Partner with Us?

The staff at MAKE Finance Group are experienced and dedicated to providing our clients with exceptional levels of advice and service.

MAKE Finance Group holds sought after commercial lending accreditations and access to a substantial panel of lenders for both Equipment and Business Finance.

As a finance broker MAKE Finance Group saves you time and stress as we negotiate with Banks and Financiers on your behalf. This allows you to keep focused on your business while we do the finance work.

This ensures you receive the best offers with the objective of saving money and increasing profitability.

Testimonials

Here is what a couple of our clients have said about MAKE Finance Group.
  • Geoff at MAKE Finance Group made the process of purchasing an investment property a seamless process. Thanks for your patience Geoff. I would highly recommend Geoff and his team at MAKE for all your finance needs. Cathy, Warrnambool

  • Geoff and Christine helped me from the ground up with acquiring my first home loan, they helped me from the application process all through to small advice on how to take on the new world I've been introduced to. I am honestly glad to have been referred to MAKE Finance Group, I couldn't have found someone as thorough, professional and friendly to have helped me along the way. Paul, Albury  

  • Geoff and the team at MAKE Finance were unbelievably helpful when we needed to refinance our business loan. After a stressful and confusing ordeal with our existing lender, Geoff made re-financing so easy, and it tool very little work from our end to sort everything out. We are so happy with everything sorted and not having to worry about our finance arrangements. We would encourage anyone with any financing needs to go and see Geoff and the team at MAKE Finance, thanks Geoff! Philip and Jenni, Holbrook

  • Thank you to the team at MAKE Finance Group, for helping me purchase my first truck. I cannot thank them enough as they went above and beyond all my expectations and made the whole process easy and stress free, I would highly recommend them to anyone. Rob, Canberra

  • Applying for a business loan (direct through a Bank) was becoming a stressful and difficult task for us as everything had to be discussed over the phone followed by numerous paperwork. Geoff at MAKE Finance Group was our savior. Your personalised service made the application for our business loan & business vehicle loan so easy. We now operate a very successful business & we could not have done this without you. We love your work! Lloyd & Kristy Franchisee of Jim’s Mowing Wodonga East

  • “MAKE Finance Group were an absolute pleasure to deal with. Right from the very beginning, even when we were just asking questions as to how home loans work and how much we could afford, they made the process incredibly easy and put everything into terms that we could understand. There’s a lot involved with buying your first home, but it felt effortless with the superb help from both Jess & Geoff. MAKE Finance Group definitely come highly recommend from us – thanks guys!” Sophie & Zach, Albury

  • “Buying a new car was a big deal for me as I had a very strong love for my only car of 10 years.  I approached MAKE Finance Group to help me source a loan for my new car, and they made me feel 100% positive about making the change, as the process that they followed to obtain the loan was flawless. They came to me which I hugely appreciated, everything was in order and all follow ups and questions were answered without hesitation. I cannot recommend them enough for their professional and friendly service.” Stephanie, Albury

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