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A survey by the niche lender reveals a surprisingly optimistic sector with four out of five anticipating growth over the coming 12 months.
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Small business upbeat and bouncing back, says Prospa
21 March 2023
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Small businesses are bouncing back despite challenging economic conditions, according to online lender Prospa, which says the majority of owners are positive about the health of their companies.
Prospa chief revenue officer and co-founder Beau Bertoli said it was the resilience of small business owners that saw them make it through the pandemic and the difficult economic conditions that followed.
“The past three years have shown that business owners are resilient, that they can navigate difficult environments and pivot to capitalise on opportunities,” said Mr Bertoli.
Approximately 70 per cent of small business owners rate the health of their business as good according to a study commissioned by Prospa, which also found 83 per cent were anticipating growth over the next 12 months.
Despite an optimistic outlook, 88 per cent of small entity operators also indicated that there would be challenges in the next 12 months.
“It’s a tough climate and not surprisingly, the survey also showed that 88 per cent of small business owners anticipate challenges over the next year with increased operating costs, high inflation and increased transport costs causing the biggest headaches for small business owners,” said Mr Bertoli.
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The survey also found that the most popular growth tactics used by small businesses were investment in digital technology at 23 per cent, the upgrade or purchase of equipment at 23 per cent and upskilling of staff at 21 per cent.
Mr Bertoli said for businesses to grow they frequently needed to access external funds. More than a quarter (26 per cent) of small businesses planned to borrow in the next 12 months to develop their organisation with an average amount of $23,585.
“There’s no doubt that access to fast, flexible funding is crucial for small businesses at this time,” said Mr Bertoli.
The survey also found that word of mouth was the most effective growth strategy for small businesses with 45 per cent listing it as the top tactic followed by account growth at 40 per cent with advertising and marketing and referrals from other businesses both at 27 per cent.
The study commissioned by Prospa surveyed 520 small businesses with less than 50 employees in January 2023.
Founded in 2012, Prospa has provided more than $3.2 billion in funding to support the growth of small businesses and has worked with more than 16,000 brokers, accountants and partners to deliver funding to its clients.
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