Almost 30% of Australian SMEs believe they would be at risk of insolvency or would need to close the doors immediately if they were to lose a major client or supplier, the SME Growth Index from ScotPac finds.

According to ASIC’s Corporate Insolvency Index, total insolvency appointments in FY2024 topped 11,000 nationally, a 39% annual increase.

On the other hand, demand for credit from SMEs is overwhelming, with 94% of SMEs surveyed foreseeing a need for new borrowings. 

“The strongest response came from SMEs expecting revenue growth, with just 3% of this category ruling out the need for business lending” the SME Growth Index finds. East and Partner conducted the research for ScotPac.

Overall, 56% of Australian SMEs are projecting positive revenue growth in the six months to March 2025, up from 53% in the previous period. 

For SMEs expecting an uplift in revenue, the average growth forecast of 9.3% is a new record, surpassing the previous high mark of 8.6% back in 2014.

Separate analysis by Westpac yesterday found the share of commercial businesses experiencing increasing cashflow has increased. 

The Westpac business cashflow gauge improved 1.2% in the September quarter, after going sideways for much of the 2023-24 financial year. 

“Topline business revenue continued to slide as the boost to real incomes from moderating inflation and stage 3 tax cuts has not fully flowed through to higher household spending” Westpac said. 

“However, there were tentative signs of a recovery with underlying revenue (sales to f inal consumers) improving in the quarter after falling for much of last year. This soft revenue outcome was more than offset by declines on the expense side. Businesses are not standing still. They are responding by adjusting what they can control: their costs. 

“Overheads and intermediate expenses have declined over the past year supporting business cashflow, and more than offsetting the growth in domestic costs.”