Australian small businesses are entering a key period, with many experiencing limited cash reserves, inconsistent readiness for payday super, and uncertainty about EOFY investment decisions, according to new research from Prospa and YouGov.
The Prospa SME Sentiment Report (Feb 2026) finds that 70% of SMEs are confident they can remain cashflow positive over the next 12 months, though this confidence is challenged by increasing compliance obligations and pending spending decisions.
From 1 July 2026, employers must pay superannuation contributions at the same time they pay an employee’s wages instead of the current approach which is quarterly. This is expected to substantially impact small business cashflow at a time many business owners are still feeling the pressure from higher inflation. Of concern, 41% of SMEs lack a full understanding of the reform, with nearly a third (30%) unaware of the change and 11% aware but not fully understanding it.
Preparedness remains inconsistent, even among those aware of the change. 19% of SMEs report they are not prepared, and 14% are unsure if they can meet the new payment schedule.
Beau Bertoli, Co‑Founder and Chief Revenue Officer at Prospa, said:
“The compliance changes to payday super will have a massive impact on SMEs’ cashflow. For businesses with thin buffers, moving super payments forward compresses working capital. The risk isn’t the rule itself; it’s being caught unprepared and being non-compliant.”
This change becomes more alarming when considering the limited cash reserves businesses are operating with. According to the report, 42% of SME’s have two months or less of expenses in reserve, including 16% with one month or less, and 14% with no reserves at all.
On average, SME owners hold only 2.7 months of expenses, leaving little margin for error quarter to quarter as obligations increase. Bertoli said, “Cashflow planning is going to be key for businesses. If you don’t have or can’t create the reserves to fund this new change it’s time to plan a funding line to support your cashflow through this change.”
Meanwhile, EOFY investment decisions are slowing. Although the $20,000 instant asset write-off is available until 30 June 2026, only 18% of SMEs plan to purchase eligible assets, 29% are unsure, and nearly 5% mistakenly believe the scheme has ended.
“What we’re seeing is hesitation, not apathy,” Bertoli said. “Businesses aren’t saying no to investment – they’re stuck deciding when and in what order. When cash is tight and obligations are moving faster, sequencing matters.” The research also points to a growing reliance upon external funding as businesses try to manage these overlapping pressures. One in three SMEs (34%) expect to access external finance in the next 12 months, up from 31% in September 2025, with those planning to borrow expecting an average of $23,181.
“For many SMEs, this year isn’t about bold expansion – it’s about staying liquid, compliant and flexible,” Bertoli said. “The businesses that plan early, model their cashflow properly and get advice will be in the strongest position to invest when the timing is right.”
For additional insights into the research, see this page here.