Getting access to funding has become the number one barrier stopping Australian small business owners from hitting their growth goals, according to new research from ScotPac.

The latest SME Growth Index found nearly 40 per cent of businesses now see access to finance as the biggest challenge to success, overtaking other pressures like rising costs and staff shortages.

The news comes as more than half of businesses surveyed (51 per cent) said they are not confident of meeting their short-term revenue targets.

ScotPac CEO Jon Sutton said many business owners can see opportunities ahead, but are struggling to turn those plans into dollars.

“SMEs are telling us they see opportunity ahead, but they’re far less certain about their ability to convert that into actual revenue,” Sutton said.

“At the centre of that gap is access to capital.”

The findings will come as no surprise to many Aussie business owners, who, despite strong demand for customers and services, often have limited access to working capital.

Cost of living meets credit crunch

The research also found cost-of-living pressures are hitting customer demand, with 28 per cent of businesses saying tighter household budgets are making it harder to meet revenue targets.

Sutton said global uncertainty is adding even more pressure, particularly through higher fuel costs and supply chain issues.

“The Middle East conflict has already flowed through to higher fuel costs and broader input prices, particularly across petrochemical-linked supply chains,” he said.

“That is placing additional pressure on margins and cash flow.”

Businesses owners xpenses are rising, yet customers are becoming increasingly cautious, creating a perfect stor, where payments don’t always land when bills are due.

Mounting pressures

The report also found 15 per cent of businesses are struggling to access grants that could help them grow, while 14 per cent said lack of time is stopping them from improving performance.

Sutton said now is the time for business owners to review their finances before problems snowball.

“SMEs should not wait until cash flow becomes a problem,” he said.

“Now is the time to speak with your finance provider, review your funding structures, and ensure you have the flexibility to respond to changing conditions.”

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