Following the release of survey results from Small Business Loans Australia, many small-to-medium businesses (SME) are calling for greater federal government support to combat destabilising challenges such as inflation, wage increases and dwindling customer spending.
Small businesses are celebrated as integral to local Australian economies, employing more than 5.1 million people and accounting for one-third of Australia’s GDP.
However, revelations from business loan comparison platform Small Business Loans Australia signify small-to-medium businesses are suffering in the current economic crisis. A startling 7742 companies went into external administration from July 2023 to March this year.
Small Business Loans Australia profiled 204 business owners and decision-makers to ascertain pressure points for SMEs and found that nearly all respondents – 94 percent – maintained the federal government should be focusing greater attention on SME businesses.
This pool of respondents concluded current government support services were wholly insufficient and argued for support to manifest in the form of reduced small-business tax rates, loan guarantees, wage subsidies, lower-rate loans and a heftier cash rate.
Businesses require immediate support
Small Business Loans Australia founder and director Alon Rajic says SMEs are seeking immediate financial relief.
“In the last tax year, nearly half of small businesses were not profitable,” he says. “Business owners need money back in their bank accounts to help alleviate or minimise their debts, not just manage them.”
Calls for tax rate cuts and loan guarantees
Survey results revealed 52 percent of respondents desire cuts to the 25 percent small business tax rate. Respondents in South Australia were the most vocal advocates for tax cuts – 67 percent – whereas ACT respondents opted for wage subsidies.
Respondents also admitted the 3.75 percent minimum wage increase on July 1 has proved to be a test to already stretched SME budgets.
Additionally, 27 percent of respondents called for the return of the SME loan guarantees introduced in 2021 and 2022. The SME Recovery Loan Scheme offered loans of up to $5 million complete with capped interest rates and extended repayment periods.
While survey participants called for more rigorous government intervention across the board, 77 percent of respondents confirmed current government initiatives such as the extension of the instant asset write-off, assistance with energy bill payments and free financial counselling were beneficial and readily embraced.
High calibre of finalists for Australian Trades Small Business Champion Awards.
