A new SME Recovery Survey conducted by American Express aims to better understand the current environment for business owners and uncover how they react as business conditions shift in 2021 with the removal of Job Keeper.
The research shows that most Australian SMEs (53 per cent) are optimistic about the year ahead. Despite the ongoing pandemic and the expected end of JobKeeper in March, which according to 55 per cent of respondents, helped or was vital in keeping their business afloat during the health crisis.
However, SMEs’ feelings of optimism are tempered by the knowledge that more than two in five businesses will need to access additional capital in the form of a loan this year. One in four (26 per cent) say as a direct result of JobKeeper ending. On average, those seeking a loan intend to request just under AU$100,000 ($97,225).
According to Martin Seward, Vice President of Global Commercial Services for American Express Australia, “Many businesses are still feeling the full impact of the Covid-19 crisis, while others have rebounded with their sights firmly set on growth. We have taken a transformational step to evolve our business beyond our existing card offering to help support businesses on their journey forward.”
The American Express research reveals that the top business resolution for nearly two in five SME operators this year is to try new ways to grow their business. More than a quarter of that group believe this growth could be more significant with the appropriate amount of capital.
Top 5 reasons for accessing capital in 2021:
- To grow/expand their business
- Buying equipment
- To ensure their business’s survival
- Marketing and advertising
- To cover essential operational costs
And yet, nearly half of SMEs seeking funds from other lenders during the pandemic said they faced challenges – from finding the process complex to being asked to use personal assets as security.
Of those small businesses that attempted to gain capital for their business from other lenders during the pandemic, top challenges they faced were:
- Finding the process complicated and lengthy
- Needing to approach several lenders before they were successful
- Not receiving the entire amount of funds requested
“We don’t believe SME’s growth should be hindered by red tape or unneeded complexity, and certainly not at the expense of having to put your house or business on the line – something that extraordinarily a third (32 per cent) of SMEs needed to do to raise capital during the pandemic. Our unsecured business loans remove some of the existing complexity that comes with many other loans on the market, with funds deposited into a customer’s account typically within two business days of approval,” concluded Seward.
American Express is partnering with ODX to provide small business with a digital and frictionless experience to tap into financing.
“We are proud to work alongside such an iconic brand in the pursuit of making working capital readily available to businesses in Australia to fuel the recovery” added Brian Geary, President of ODX
About the American Express Business Loans
- Unsecured funding from $5,000 to $250,000
- Annual interest rates from 10.95% p.a.
- Terms of 6,12,18 or 24 months
- Quick and simple online application process
- No set-up or early repayment fees. A $30 fee for a missed payment
- Fast decisions with funds usually delivered within two business days of approval
- Loan approval is subject to American Express eligibility criteria
For more information on Business financing read Small Business Answers guide on Loans & Equity Funding
About the research: The research was commissioned by American Express and conducted by Lonergan Research per the ISO 20252 standard. Lonergan Research surveyed 1,009 Australian small to medium-sized (up to 199 employees) business leaders. Surveys were distributed throughout Australia, including both capital city and non-capital city areas. The survey was conducted online amongst members of a permission-based panel, between 18 and 28 December 2020. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics as of the 2016 Census.