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Timely access to cashflow the key to help SMEs enjoy a merry Christmas

by OnDeck Australia,   Dec 16, 2020

Three out of five SMEs say the silly season puts serious demands on cashflow, and timely access to finance is needed to make the most of the peak trading period of the year.

  • Independent research by OnDeck Australia* found one in two (55%) SMEs surveyed say major events such as Christmas can bring challenges to their business.
  • The key disruptors include loss of revenue (41%), a slowing of normal trading conditions (41%), and delays in the delivery of products/services (22%).
  • Three out of five (57%) SMEs say access to cashflow will help them navigate the festive season, and with Christmas just around the corner, rapid access to finance is critical.

 

Sydney (16 December 2020): Research by leading online SME lender OnDeck Australia confirms that timely access to finance can help Australia’s small business community make the most of the peak trading period of the year.

While the festive season is keenly anticipated by many SMEs, OnDeck’s survey found Christmas can also bring challenges to small businesses. Among the SMEs surveyed, 55% say they have been negatively impacted by past major annual events such as Christmas.

The top five negative outcomes reported were:

  1. 41% – loss of revenue
  2. 41% – slowed or halted normal business operations
  3. 22% – delays in the delivery of products or services
  4. 20% – increased costs
  5. 13% – loss of customers to competitors.

Access to cashflow is critical

OnDeck’s research found that three out of five (57%) SMEs surveyed say access to cashflow will help their business be better prepared for the festive season. However, as the peak trading season of the year rapidly approaches, the need for rapid access to finance is critical.

Mr Cameron Poolman, CEO of OnDeck Australia, said, “Despite a difficult year, SMEs are making significant progress towards recovery. OnDeck saw loan applications rise 30% in September, with a further 50% jump in October. Even better, consumer confidence is currently at a 10-year high[1], and the 2020 festive trading season is expected to see plenty of activity at the check-out. It makes the next few weeks critical, with the festive trading period offering a valuable opportunity to make up some of the revenue lost in 2020.

“However, the Christmas period also brings increased costs, and it’s no surprise that 57% of SMEs say cashflow funding will help them make the most of the holiday season.

“With only weeks left until Christmas, SMEs need access to finance now – and that calls for rapid funding decisions.

“As an online, SME specialist lender, OnDeck provides a simple, streamlined application process, and we can have funds available in as little as one working day,” said Mr Poolman.

OnDeck is also an advocate of the SMARTBox loan comparison tool that makes it easy for SMEs to clearly understand the cost of financing, and make informed decisions based on the expected return on investment of any assets funded.

 

Five ways SMEs can maximise the trading potential of the festive season

  1. Start recruiting early

As the peak trading period of the calendar, Christmas often means hiring additional part-time or casual staff at a time when permanent team members may want to take leave. Develop staff rosters early, identify days/times when extra headcount is needed, and have new recruits lined up from an early stage.

 

  1. Have finance in place for inventory discounts

Discuss the possibility of inventory discounts with suppliers and be sure you can meet the conditions (such as advance/early payment terms) that secure a saving.

 

  1. Be e-commerce ready now

Online trade has flourished during the pandemic. Understand the delivery times your business can offer, and alert consumers to Christmas cut-off dates on your website and via social media. Delays could tarnish your brand.

  1. Develop contacts for cashflow funding

The holiday season extends into the New Year, and it pays to know who your business can turn to for cashflow funding at a time when banks often have limited staff available. Your broker is a useful contact, and online-only lenders such as OnDeck are not constrained by regular business hours.

  1. Plan to take time out

It’s been a tough 12 months, and SME owners could do with a break! Use the holiday season to maximise revenue but be mindful of your own wellbeing. Allow time to unwind, relax and take a break from what has been a year of unprecedented disruption.

 

ENDS

About OnDeck

OnDeck is a proven leader in transparent and responsible online lending to small business. Founded in 2006, the company pioneered the use of data analytics and digital technology to make real-time lending decisions and deliver capital rapidly to small businesses online.  Today, OnDeck offers a wide range of term loans and lines of credit customized for the needs of small business owners. OnDeck is now part of Enova International Inc. and has provided over $13 billion in loans to over 110,000 customers in 700 different industries across the United States, Canada and Australia. In Australia, OnDeck is backed by leading accounting software provider MYOB and has a 5-star rating from Trust Pilot. For more information, visit

 

*About the research

The independent research was conducted online in April 2020 by Honeycomb Strategy across more than 300 SME owners Australia-wide. The survey included SMEs with less than 50 employees, annual turnover of $50,000-$5 million, and in operation for at least 12 months.

 

About OnDeck’s COVID-19 Resource Hub

OnDeck’s COVID-19 Resource Hub provides SMEs with details about government stimulus packages, practical tips on managing a small business through uncertain times, case studies of inventive SMEs pivoting their expertise to survive the pandemic and recommended reading from trusted sources. To find out more visit www.ondeck.com.au/covid-19/

 

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Media Contacts:

Anthony O’Brien

Corpwrite Australia

+61 (0) 411 578 818

anthony@corpwrite.com.au

 

Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at December 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.

[1] Westpac-Melbourne Institute Index of Consumer Sentiment, 9 December 2020 https://www.westpac.com.au/content/dam/public/wbc/documents/pdf/aw/economics-research/er20201209BullConsumerSentiment.pdf

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