MELBOURNE, Australia, June 7, 2021 /PRNewswire/ -- Melbourne business owners have recorded a surge in demand for early invoice payments indicating that new government support measures may not be enough.
Data released by Australia's largest supplier payments platform, Earlytrade - which allows suppliers to confidentially request payment from registered customers an average of 20-30 days ahead of contracted terms - recorded two spikes in demand from Melbourne businesses since restrictions began.
While government stimulus is crucial, many Melbourne business owners will still struggle to pay staff, pay bills and meet orders, says Earlytrade chief executive, Guy Saxelby.
"There is a lot of built-up trauma for business owners in Melbourne. We saw a doubling of demand the week the lockdown was first announced as people prepared for the worst," he said.
"There was an even sharper spike in demand for cash flow, more than 130 percent, straight after the governments announced the new disaster payments and the extension of restrictions."
Mr Saxelby said small and medium businesses in Melbourne were hurting the most given their finances had already been depleted.
"It really stings when you have to debate the merits of paying staff over filling customer orders. There's a serious mental health toll; not just the obvious strains on the business," he said.
"Owners may have learned to gather their chestnuts for a longer winter, but they are coming out of a tough period into more pain. For many owners, the government support simply won't be enough to get through."
Mr Saxelby said it was in the interests of large customers with healthy balance sheets to support their suppliers with more flexible payment options.
"The banks are reporting long approval times on business loans plus taking on debt may not be the best option right now," he said.
"Owners who can get faster cash from their customers will be able to weather the storm and possibly even think about business pivots. For others, another seven days might be the last straw.
"Melbourne business owners need help from wherever it comes and that includes large customers who can shorten payment times to make sure their suppliers stay on-track, and they themselves can meet customer orders."
Earlytrade is Australia & New Zealand's largest supply chain payments network, trusted by 50,000 suppliers