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Festive season turns frantic for SMEs

by OnDeck Australia,   Dec 10, 2019

Festive season turns frantic for SMEs


As Australians gear up for the peak spending period of the year, up to 58% of SMEs could be negatively impacted – but additional finance can often be the solution. And that means opportunities for brokers.

If Christmas 2019 is anything like last year, Australians will collectively spend around $51.5 billion between now and 25 December[1].

Plenty of SMEs will be hoping a fair chunk of that spend goes through their cash registers. Surprisingly though, research shows that a holiday season isn’t always a cash cow for small businesses.


A not-so-festive season for the ill-prepared

According to our recent study, three out of five (58%) small businesses say they are negatively impacted by calendar events and public holidays such as Christmas. One in ten (12%) report being ‘severely impacted’[2].

The problems can arise from a variety of sources including increased costs (17%), delays in debt payments (22%), delays in delivery of products (26%) and even loss of customers to competitors (6%).

On the plus side, one in two SMEs actively plan for calendar events. However, the majority (59%) of small business owners agree that having fast access to funds can help them prepare for major events such as the holiday season.

Cameron Poolman, CEO of OnDeck Australia explains, “For many SMEs, having access to finance can mean taking advantage of valuable opportunities. A homewares retailer for example may need an extra $20,000 worth of stock heading into Christmas – that’s inventory that could deliver an additional $10,000 in gross revenue. The catch is that the business may not have the cashflow to support an upfront purchase.”

“It’s also about managing additional costs,” notes Poolman. “Many SMEs take on additional staff over the festive period, and this means managing recruitment costs and higher than normal payroll expenses. Other costs such as marketing and advertising also tend to be inflated in the lead up to Christmas. It all highlights the need for additional funding.”


Traditional lenders are slow to respond

The challenge facing many SMEs is that the process of securing necessary funds can be both protracted and bogged down by red tape. Our research found over one in four SMEs have had their business negatively impacted by the time taken to secure finance through traditional lenders.

Yet, as Poolman points out, “In the lead up to the festive season, time is of the essence. SMEs that don’t have their finances ready to go to take advantage of opportunities when they arise, will miss out.”

As an online SME lender, we offer a streamlined application process. Most of the details OnDeck asks for, such as bank statements, can be uploaded directly to OnDeck online. Loan approval can be delivered in as little as one business day.


Opportunities for brokers

The festive season frenzy provides opportunities for brokers at a time when the home loan segment of their business may be slowing.

“One in four of a broker’s existing home loan clients are likely to be small business owners,” says Poolman. “This provides a ready base for brokers to diversify their business at a time when many SMEs are actively seeking finance.”


70% growth across the broker channel

Already, a growing number of brokers have successfully diversified their business into SME lending, and this has seen OnDeck record 70% growth in broker-generated loans in the last reporting period.

Poolman believes this growth reflects the support we currently offer to brokers. “Our expanded Business Development team works closely with brokers who are new to SME lending.  We provide a partner portal giving brokers access to marketing advice and tools that include ‘ready to send’ eDM templates complete with the broker’s logo and brand colours.”

By making the move into SME finance today, brokers can help their SME clients celebrate a very merry Christmas, while also enjoying a healthy share of the festive spending pudding themselves.


As the small business loan specialist, OnDeck is here to help you and your SME clients thrive this holiday season.

OnDeck’s loans from $10,000 – $250,000 are ideal for SME clients who are seeking finance to fund business growth, from purchasing additional stock to bringing on more staff over the busy Christmas period. Plus, their ready-made marketing assets make it easier than ever for you to unlock the potential in your database.


Get in touch with your local OnDeck Business Developer for more information.


[1] Roy Morgan: 2018 Christmas retails sales to grow 2.9% to $51.5 billion

[2] AltFi research conducted online in April 2019 on behalf of OnDeck Australia by Honeycomb Strategy. The study included 430 Australian SME owners with less than 50 employees, annual turnover of $50,000-$5 million, and in operation for at least 12 months.


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