New Zealand small businesses – what will happen in the future?

New survey shows SMEs are upbeat and need finance

New Zealand small businesses – what will happen in the future?

Despite a challenging year, small businesses in New Zealand are feeling positive about the future as the Christmas holiday period approaches, according to a new survey from Prospa.

The SME lending specialist found that business sentiment was upbeat and small business demand for finance was on the rise heading into summer, with 73% of small businesses surveyed said they felt good about their overall business health and 63% were optimistic about their business’ growth potential over the next 12 months.

A total of 514 businesses were surveyed, which employed between one and 49 people. Of these, 80% said they felt prepared for the holiday season and 43% expected their business revenue would increase in the next 12 months.

Prospa managing director Adrienne Begbie (pictured above) said she was pleased to see such a positive outlook from Kiwi small businesses after a difficult few years.

“This is a really positive sign, as the end of year trading period is often critical for many small businesses,” Begbie said.

“We often see an increase in demand for funds in the lead up to Christmas as businesses need to pay for extra stock and staffing, as well as to cover the cash flow gaps that come at this time of year. The overall results show that businesses are feeling positive about their financial health even as they face constraints from rising costs.”

Begbie said increased overheads was the biggest concern identified by small businesses (31%), followed by increased costs to transport and deliver goods from rising fuel prices (21%) and unpredictable unstable revenue (20%).

“The results we collected also indicate that business owners feel the current environment is favourable for growth with 38% planning on investing in growing their business within the next 12 months,” she said. “Meanwhile, 45% say they are likely to access external funds.”

Begbie said small businesses traditionally found it difficult to access funds through traditional banks, so in October Prospa announced a number of end of year funding offers aimed at helping small business clients through the holiday and new year period.

“These included loans and a line of credit with discounted interest rates which help paint a positive picture after the general uncertainty we’ve been living through. Small businesses seem to have their ‘mojo’ back, despite the challenges of increased costs and supply chain disruption,” she said.

“It’s really encouraging to see Kiwi SMEs planning to invest in business growth despite a tough operating environment. Access to flexible funding is key reason that SMEs are not only able to survive but thrive.”

Prospa has had a successful financial year, following its announcement that it facilitated $3bn in SME loans in both New Zealand and Australia during FY22.