A recent survey reveals that the economic climate is significantly impacting the mental health of Australian small and medium-sized enterprise (SME) owners. Research commissioned by the Commonwealth Bank of Australia (CBA) indicates that 52% of business owners and senior managers have reported a decline in mental health over the past year due to economic pressures.
The study also highlights that nearly two-thirds (65%) of surveyed businesses have faced unexpected expenses amounting to $7.3 billion in the last year. On average, these businesses incurred about $4,300 in unforeseen costs, primarily due to equipment repairs and replacements (48%), increased supplier costs (33%), and higher utilities expenses (32%).
Rebecca Warren, CBA’s executive general manager for small business banking, acknowledged the considerable challenges faced by small businesses. “Running a small business is hard yakka, and rising costs and unexpected expenses can significantly impact operations when finances are already strained,” Warren stated.
CBA has been proactive in reaching out to small-business customers to offer support through measures such as business overdrafts, invoice financing, and flexible repayment plans. The bank aims to ensure that business owners are aware of and can access these tools to help manage their financial pressures.
The survey findings coincide with data from CreditorWatch, which reveals that 34% of private businesses became insolvent or closed voluntarily due to tax debts exceeding $100,000 and overdue by more than 90 days. Brenden Scotter, director of Commercial Point Finance, noted that cash flow issues are exacerbated by industry retractions, long invoice payment times, and rising costs, including tax debts.
Scotter explained that while various cash flow loans are available, clients often struggle to meet servicing requirements due to weakened cash flow, complicating the approval process for unsecured loans.
