The year 2020 was tough on small businesses international. Australia performed much better than many other countries. However, the loss to SMEs was massive and many of them shut down with many more at the chance of doing so in 2021. The major problem for small businesses that come from the COVID-19 pandemic is money flow issues. Those could have been alleviated by loans, but those are in quick supply as well now. Therefore, it’s awfully hard to say how the financial recovery of Australia will continue in 2021. There are some encouraging improvements, but the situation is complex.
Impact of the COVID-19 Pandemic on Australian Small Business in 2020
The covid19 pandemic of 2020 is a global crisis that is also unparalleled. Therefore, its full effect cannot be predicted. The impact of this worldwide economic crisis is contrasted to that of the Huge Recession and recession after World War 2. However, the truth is that the world is quite unique today and we have yet to see the full effect of this situation.
However, now in 2021, we can see that for all the trials of 2020, the Australian small business sector didn’t break below the challenge. Small businesses are the most disturbed group in this crisis because they often experience cash flow issues. In fact, the majority of small businesses go “paycheck-to-paycheck”. Therefore, lockdowns and imposed halt on international commerce should have ravaged the sector.
The only reason why this hasn’t occurred is the government’s aid and financial assistance programs. These programs offered various types of help, which allowed many small businesses to get all through the lockdown phases.
Moreover, many SMEs were able to adapt to the situation somewhat by adapting their business models. The most common of these changes were the mode of offering products/services, staff duties, Working hours, etc. These changes helped SMEs to keep working even in this difficult time. However, neither the change nort financial support from the government is able to remove the negative effect of the pandemic.
The simple fact of the matter is that small businesses involve constant cash flow in order to function. If they are unable to get it from doing business, they need financing to tide them over until lucrative trade is restored. However, financing is presently in truly short quantity due to the same pandemic. Even other lenders have mostly stopped loan beginning due to the lack of funds or excessive risks.
Government Grants and Financing Programs for Small Business Loan
Small business grants and an array of debt relief and financing support packages are vital for the existence of Australian SMEs in the present crisis. The government of Australia, doing its best to give financial relief where it is most required. This is helping the small business position a great deal. The findings of these programs have increased further when online lenders merged them.
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