This November 2022 survey records expectations for 2023, not current costs or borrowing behaviour. For dated market benchmarks, see the business interest-rate guide.
About the Study
SMB Loan commissioned a study of an independent panel of 210 Australian small to medium enterprises (SMEs) to discover which business costs inflation has impacted, and whether SMEs will struggle meeting their expenses and may even need financing to get through tough times. Respondents were asked to highlight which business costs, from a list of 10, they predict they will struggle to meet in 2023. The listed costs were:
- Labour
- Supplier costs
- Petrol
- Equipment purchases
- Rent
- Insurance
- Office and staff amenities
- Utilities
- Business consultants
- Taxes
Respondents then asked to reveal whether they would consider getting a loan to meet these costs and, if so, how much (from under $10,000 to over $2 million).
SMB Loan surveyed 210 owners and senior decision makers across the full SME spectrum: micro (1 to 10 employees), small (11 to 50 employees) and medium sized (51 to 200 employees).
Recruitment methods, response rate, weighting and respondent counts for each state and business-size group are not available in the retained records. No subgroup counts have been inferred from rounded percentages. Treat the breakdowns as descriptive results; they do not establish national representativeness or statistically reliable differences between groups.
Which business costs will Aussie SMEs struggle to meet the most now and in 2023?
Nearly three in four (72 per cent) of Aussie SMEs revealed they would struggle to meet some business costs now and will continue to do so in 2023. The costs that will most impact businesses are fuel and business suppliers (chosen by an equal 31 per cent of respondents). This was followed by 26 per cent of respondents who said they would struggle to meet labour costs, 21 per cent will struggle with rent, 19 per cent with equipment purchases, an equal 17 per cent with insurance premiums and tax, 10 per cent with office and staff amenities, 8 per cent with business consultants such as HR or accounting and 1 per cent 31% on other non specified expenses.
72%
Just over one quarter (28 per cent) said they won’t struggle with any costs.
The survey asked about expected expense pressure before asking whether respondents would consider a loan. A difficult cost does not automatically lead to an application, approval or drawdown. Multiple expense selections should not be added as if each respondent named only one cost, and the results do not establish how much a business should borrow today.
By business size.
Across all 10 cost categories, micro businesses predicted they will be better off in meeting expenses than small and medium sized businesses.
Meanwhile, supplier costs are predicted to be the most difficult for small businesses to meet, with this expense topping the list for 46 per cent of small businesses. This was followed by fuel costs, chosen by 39 per cent of small businesses. Among medium sized businesses, fuel is the most challenging cost to meet, chosen by 40 per cent of respondents in this business category. Medium sized businesses are also struggling with the cost of equipment purchases and insurance premiums (chosen by an equal 32 per cent of businesses in this category).
By State.
SMB Loan analysed responses across States. It found nearly three in four (73 per cent) of NSW, Victorian, and South Australian businesses are struggling to meet some inflated business costs, followed by 71 per cent of Western Australian businesses and 69 per cent of Queensland businesses.
| Response | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| Labour (salaries, wages, contractor bills) | 26 | 23 | 20 | 27 | 38 |
| Supplier costs | 29 | 39 | 27 | 27 | 33 |
| Petrol | 36 | 36 | 18 | 33 | 38 |
| Equipment purchases | 15 | 13 | 31 | 20 | 19 |
| Rent | 26 | 16 | 16 | 27 | 14 |
| Insurance premiums | 29 | 18 | 16 | 13 | 14 |
| Office and staff amenities | 8 | 11 | 11 | 13 | 5 |
| Utilities (power/water) | 21 | 23 | 22 | 13 | 14 |
| Business consultants (such as accountants and HR) | 8 | 7 | 9 | 13 | 5 |
| Taxes | 20 | 16 | 20 | 13 | 14 |
| Other | 2 | 0 | 2 | 0 | 0 |
| None, my business is not struggling to meet any costs | 27 | 27 | 31 | 27 | 29 |
Western Australian businesses owners are most likely to struggle paying labour costs, chosen by 38 per cent of SMEs, followed by 27 per cent of South Australian businesses, 26 per cent of NSW businesses, 23 per cent of Victorian businesses and 20 per cent of Queensland businesses.
Western Australian businesses are also struggling to meet inflated supplier costs and fuel prices above any other state.
Inflated rents are a significant issue among South Australian and NSW SMEs with 27 per cent and 26 per cent, respectively, struggling to meet this cost. This is followed by an equal 16 per cent of Victorian and Queensland businesses and 14 per cent of Western Australian businesses.
What percentage of Aussie SMEs would consider getting a loan to meet these costs, and if so, how much?
SMB Loan also sought to discover whether inflated costs of doing business would prompt SMEs to take out a loan in the next year to keep up with their expenses.
The published amount groups were 28% considering a business loan of $50,000 or more and 25% considering less than $50,000. They sum to 53%. The earlier 54% combined headline cannot be reconciled from the retained groups, so it is withdrawn; no missing 1% category has been invented.
A bigger proportion of small businesses (75 per cent) are likely to get a loan to meet expenses in the next year, followed by 66 per cent of medium sized businesses and only 32 per cent of micro businesses.
More than a third (37 per cent) of small businesses would consider borrowing more than $50,000, while 8 per cent of micro businesses would borrow the same. In comparison, a similar proportion (39 per cent) of medium sized businesses would borrow more than $100,000.
75%
When comparing responses across States, SMB Loan found that a greater proportion of Victorian SMEs (61 per cent) would to take out a loan in the next year to meet rising business costs. This compares with 57 per cent of NSW businesses, 52 per cent of Western Australian, 47 per cent of South Australian and 40 per cent of Queensland businesses.
| Response | |||||
|---|---|---|---|---|---|
| State (%) | |||||
| NSW | VIC | QLD | SA | WA | |
| Under $10,000 | 6 | 9 | 16 | 20 | 14 |
| Up to $50,000 | 20 | 16 | 4 | 7 | 14 |
| Up to $100,000 | 6 | 18 | 4 | 7 | 14 |
| Up to $250,000 | 8 | 13 | 7 | 0 | 5 |
| Up to $500,000 | 9 | 2 | 7 | 0 | 5 |
| Up to $750,000 | 2 | 0 | 2 | 7 | 0 |
| Up to $1 m | 8 | 0 | 0 | 0 | 0 |
| Up to $2 m | 0 | 4 | 0 | 0 | 0 |
| I would not get a loan | 43 | 39 | 60 | 53 | 48 |
What remains unverified
The total sample is reported as 210, but respondent counts by state and size are not available. We do not infer those counts from rounded percentages or assert that small subgroup differences are meaningful. The questions concern anticipated costs and possible borrowing, not loans actually taken. No update to the page turns those 2022 expectations into current conditions.