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How are you looking this festive season?

Posted by: Danielle Moore at November 03, 2022

Although Covid restrictions have eased across the nation, many businesses still face significant challenges in the lead-up to Christmas. Interest rate hikes, staff shortages, issues with supply chains and rising fuel costs are all putting additional pressure on many small and medium-sized enterprises (SMEs). And with increased living costs, many families are also cutting spending, resulting in a reduced demand for many products and services.

But despite these challenges, we still see some positive signs for SMEs. According to one of Rebus Capitals’ funding partners ScotPac, SME confidence is growing, with over half of Australia’s SMEs predicting positive revenue growth for the last six months, an increase of 6% compared to the previous year. 

Considerations for SMEs 

As we approach Christmas, here are some things to consider if you’re an SME to help you successfully navigate the festive season: 

  1. Review your funding arrangements  

Given the increasing costs of operating a business, the holiday season provides an excellent opportunity to determine whether your funding arrangements are appropriate for the short and long term. Many diverse finance options are available to help SMEs meet their changing needs, offering access to fast and flexible capital. 

Although we can all get caught up in the excitement of the festive season, it’s essential to understand your profit margins before you start discounting stock for sales (or feel pressured to do so by market forces). Assessing your margins can help you know the level of increased sales you need to maintain your margin. 

According to a recent report by Xero, half of all payments made to small businesses are typically late. Late payments can cost businesses over $1 billion yearly, and delays can be even more likely during the holidays.

With the global supply chain still feeling the effects of Covid, delays can be even more pronounced during the holiday season. In addition, inventory management can affect suppliers, manufacturers and retailers due to the fluctuation of customer demand, putting more pressure on your employees, partners and supply chain. 

While it can be tempting to increase your stock levels so you have more to sell during the holiday period, it can be risky. You may end up with excess stock that goes out of date or style, negatively impacting your cash flow. 

For example, unlike traditional banks, non-bank lenders can tailor lending to different scenarios and value unconventional income or asset structures. As an SME, limiting yourself to one funder can mean you’re not maximising the opportunities in your balance sheet. 

How Rebus can help

At Rebus, we work with our clients to tailor solutions to deliver their goals. We fill the gap between banks and non-banks and understand what each offers so that we can create a unique plan for our clients. We’ll guide you to make sensible commercial decisions based on current market opportunities and help you to look at your balance sheet more strategically to make the most of your options.

In the current market, it pays to be strategic. At Rebus, we will always look at ways to improve your capital structure, re-structure your funding obligations where relevant and drive greater balance sheet efficiencies. Talk to us today to discover how we can help you.

Danielle Moore

The Trustee for the Rebus Capital Partners Unit Trust ABN 88 452 904 420. Authorised Credit Representative 523233 under Australian Credit Licence 536100.