Carbon tax and cash flow concerns reduce SME confidence

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Carbon tax and cash flow concerns reduce SME confidence

Sydney, 05 September 2012: Small business sentiment is continuing to decline, according to the recent Bibby Barometer Small Business Survey.

The survey found that only 20% of small and medium businesses (SMEs) plan to invest in their businesses in the year ahead, down from 30% in February 2012 and 33% in July 2011.  The Bibby Barometer Index declined from 100 to 94 to 87 respectively over that time period.

Contributing to this downturn in sentiment is the perceived impact of the carbon tax.  Although it has only been in effect for a short time, the Barometer found that the majority of respondents (72%) have been impacted by the tax, with 33% saying it has already had a major impact on their businesses and 81% believing it will have a long-term impact on their businesses.

Conducted in mid-August 2012 and the third of its kind, the Bibby Barometer Small Business Survey is a national study run twice yearly, surveying primary decision makers in over 200 non-retail SMEs.   

Gary Green, National Sales Director, Bibby Financial Services Australia, said, “At a time when big businesses have by and large had a good reporting season, small businesses are struggling. We are seeing an increase in cash flow problems, with 83% of SMEs experiencing cash flow issues in the past year - most commonly because of slow payments.  The majority (77%) of SMEs are concerned about their customers becoming insolvent in the year ahead.

“We hear a lot about the challenges to the retail sector, but this research covers non-retail small businesses nationally - and they are also hurting. We are seeing a continued downturn of SME sentiment, with the result that 57% have reduced their headcount, including 28% that have reduced the number of full-time positions in their business, 25% that have replaced full-time with part-time positions, and 16% that have replaced full-time staff with casual employees.

“It speaks to the extraordinary resilience of the SME business owners, that despite their expectations of a tough time ahead on many fronts, 71% remain optimistic regarding their business prospects for the next 12 months.  And the SME business owners are working hard to overcome their challenges - with 48% now working even longer hours than in the past.

“However, we seem to need some circuit breakers to help SMEs break through their negative sentiments and begin to invest in growth and productivity for the future.  A resounding 71% of SME business owners do not think the Government is doing enough to help small businesses in the current economic climate,” he said.

ENDS

Media contacts

Rebecca Murray, FCR: t (+612) 8264 1002/ +61 423 338 005

Andrew Briggs, Bibby Financial Services (Aust): t (+612) 9310 8921/ + 61 403 096 807

Bibby Financial Services is one of the world’s leading global debtor finance specialists (also known as invoice finance, factoring, cash flow finance and invoice discounting) - a flexible and accessible cash flow funding tool for small and medium sized businesses.  With over 6000 clients in 14 countries worldwide, Bibby Financial Services is part of the Bibby Line Group, a family-owned business-to-business services group with origins in shipping dating back over 200 years to 1807.
 
Debtor finance is designed to improve business cash flow and support business growth by releasing cash tied up in unpaid invoices. Unlike other funding arrangements, no real estate security is required, making it more accessible for small and medium sized business owners.

Bibby Financial Services Australia has grown dramatically, in recent years at an average 20% pa, due to increasing awareness of debtor finance as a smart choice for improving the cash flow, and a commitment to providing flexible, tailored solutions quickly. It now serves clients nationally, via a network of offices in Sydney, Melbourne, Brisbane, Perth and Adelaide.

For more information on Bibby Financial Services please visit www.bibby.com.au or follow them on