SMEs still against the ropes

Written on the 2 December 2010

AUSTRALIA is passing through the eye of the economic storm but is facing at least another year of difficult economic conditions, according to Vincents Chartered Accountants.

Vincents director of insolvency and reconstruction Nick Combis, says despite markets experiencing a relatively steady period, insolvency of small to medium sized companies had continued to increase.

“Turnover for SMEs is currently down 15 to 25 per cent, which is very significant considering Australia has supposedly been through the worst of the GFC,” he says.

“Unfortunately for many operators, the flow-on from world markets is still in full effect and until the market corrects itself, I can’t see the current trends stopping in less than a year.”

Combis says SMEs are increasingly in two minds about forward planning.

“On one hand, SMEs, particularly in retail and hospitality, want additional cash flow to carry on during the slowdown but on the other, they are constrained by overdrafts because banks are not lending as much due to the uncertainty,” he says.

“Large obligations, such as leasing costs, stay constant regardless of market conditions so businesses like small retailers are already looking for ways to insulate themselves until well after the election.”

Banks are putting downward pressure on small businesses, with many forced to sell off assets to keep in operation.

Combis says there are still issues to settle before the budget is back in surplus and the best course of action for SMEs is to maintain a ‘disciplined operation’.


Latest News

HOW INGRID BONNOR TURNED A LABOUR OF LOVE INTO A WORLDWIDE FASHION ICON

BEFORE Ingrid Bonnor started her bridal robe and feminine sleepwear company Homebodii in 2011, she didn't have an...

G8 EDUCATION EXECUTIVE CHRIS SCOTT RETIRES AS COMPANY CUTS CHINESE TIES

LONG-TIME managing director and executive of G8 Education (ASX: GEM) Chris Scott has announced his retirement, on ...

REGIONAL BANKS HIT OUT AT RATING CUT AND WARN BIG FOUR WILL BENEFIT

REGIONAL banks have hit out at a downgrade on their credit ratings, warning that it will increase their wholesale fun...

$71 MILLION SALE OF 'SYDNEY SIX' GIVES RISE TO WESTERN SYDNEY INVESTMENT HOTSPOT

SIX INDUSTRIAL assets in Sydney's West, dubbed the 'Sydney Six', have sold for a collective $71 million, ...

Related News

REGIONAL BANKS HIT OUT AT RATING CUT AND WARN BIG FOUR WILL BENEFIT

REGIONAL banks have hit out at a downgrade on their credit ratings, warning that it will increase their wholesale fun...

THE COMPANY THAT DECIDED IT WAS GOING TO GIVE A CRAP THANKS TO CROWD FUNDING

SIMON Griffiths is using toilet paper to save the world.

In 2012, on the back of an IndieGoGo crowdfunding campaig...

SURFSTITCH DOWNGRADES EARNINGS AS SHARES PLUNGE 25 PER CENT IN A DAY

TROUBLED online sports clothing retailer SurfStitch is considering selling off more of its assets and will close i...

AUSCANN RESUMES TRADE AFTER $12 MILLION CAPITAL RAISING

IT'S BEEN a big few days for medical cannabis manufacturer AusCann (ASX: AC8), as the company emerged from a trad...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter