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The non-bank lender’s SME Growth Index has recorded strong revenue growth optimism from small businesses in the third quarter of 2023.
Non-bank business lender ScotPac has revealed that SME growth forecasts have reached a seven-year high amid a “wildly fluctuating market”.
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ScotPac yesterday (24 October) revealed the results for its SME Growth Index Round 19, for the third quarter of 2023, which found 57 per cent of Australian SMEs expect positive revenue growth over the next six months, a seven-year high.
The survey conducted by East & Partners, which interviewed 722 SME enterprises with annual revenues between $1 and 20 million, saw the range of SME revenue growth projections stretched across a record margin, with a high of a 13 per cent increase and a low of a 22 per cent decrease.
ScotPac’s index found Western Australian and Queensland-based SMEs were the nation’s most upbeat, with 92 per cent and 84 per cent predicting positive revenue growth over the next six months, respectively.
Conversely, Victorian SMEs were seen to be the most pessimistic with only 17 per cent forecasting positive revenue growth – being the only state under 50 per cent – while 69 per cent of SMEs warned of income decline.
Jon Sutton, ScotPac’s chief executive, stated that the results of the index showed that while businesses were combating increased costs and economic difficulties, the resilience of Australian SMEs was again on display.
Mr Sutton stated: “Australian SMEs account for 97 per cent of all businesses in this country and employ nearly 8 million people, so the way they feel about their growth prospects has a big say in the health of the national economy.
“While the full impact of recent award and minimum wage increases is yet to filter through, the fact that average SME growth forecasts remain at near record levels is a great sign of confidence as inflation begins to taper.
“The positivity in our regions is significant, particularly in WA and Queensland, and it highlights the often-overlooked role of SMEs in our natural resources supply chain.”
Regardless of their stage of growth, Mr Sutton encouraged SME owners to talk regularly with their brokers and advisers to assess their business finance options.
He stated: “In the current economic climate, it is more important than ever for SMEs to ensure they are getting the right advice so they can access the support they need when they need it.
“There is clear evidence that SMEs in some markets and some parts of Australia are thriving – including our booming regional economies – while others with more exposure to cost of business and cost-of-living pressures are feeling the pinch.
“It is also clear that SMEs are increasingly looking to brokers to help them ensure their lending arrangements are aligned with their current and future financial goals and are enabling the best use of capital.
“With 15 per cent of SMEs reporting they are unsure of how to fund new business investment or source alternate working capital solutions, there is an opportunity for brokers to more regularly discuss goals and performance, and strengthen their partnerships with SMEs.”
[Related: Optimism amid business conditions worsening]
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