Cash Flow Challenges Impact Nearly 80% of Australian Small Businesses

January 16, 2025 — A new survey commissioned by Commonwealth Bank of Australia reveals that nearly 80 per cent of Australian small to medium businesses (SMBs) have experienced cash flow issues in the past 12 months, a news release by Commonwealth Bank of Australia states.

The research identifies declining revenue (35 per cent), low cash reserves (30 per cent), and seasonal fluctuations (27 per cent) as the primary factors contributing to these challenges.

Despite these difficulties, the vast majority (85 per cent) of surveyed businesses are actively employing strategies to manage their cash flow. The release states that these strategies include reviewing and decreasing expenses (34 per cent), maintaining a cash reserve (27 per cent), seeking additional revenue streams (26 per cent), and increasing sales or pricing (25 per cent).

However, a concerning finding is that over a quarter (27 per cent) of Australian small business owners have resorted to dipping into personal savings or forgoing their own salary, or both, in the last year to manage cash flow.

Rebecca Warren, CBA Executive General Manager of Small Business Banking, emphasized the importance of effective cash flow management for long-term business success. "For small businesses, success often hinges on a delicate balancing act… It’s not surprising that the economic challenges of the past year have resulted in cash-flow impacts for many Australian SMBs," Ms. Warren stated. She also cautioned against relying on personal savings or forgoing salary as long-term solutions.

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