Fewer SMEs report cash flow woes: DBS survey

Three in 10 SMEs now flag cash flow concerns as a top issue, compared with more than seven in 10 when asked the same question in early February. ST PHOTO: TIMOTHY DAVID

Cash flow issues appear to have eased for smaller firms as government relief kicks in, noted a survey released yesterday.

It found that only about 30 per cent of small and medium-sized enterprises (SMEs) polled now flag cash flow concerns as a top issue, compared with 70 per cent in early February.

DBS, which polled 300 firms late last month, noted yesterday: "This 40 percentage point drop indicates that the combined efforts of the Government and financial institutions are giving SMEs much-needed relief from intense cash-flow pressures that they would otherwise be facing."

The most immediate concern now for medium-sized SMEs - those with annual turnover above $20 million - is creating new revenue streams to capture opportunities as the nation eases out of the circuit breaker period.

About half of these firms identified this as their key priority.

Small SMEs - those with annual revenue of $1 million to $20 million - said access to working capital and creating new income streams were seen as equally important priorities.

Overall, the firms ranked digital transformation and workforce upskilling among their lowest priorities, with just 10 per cent considering digital transformation an immediate focus, while only 3 per cent flagged training staff as a priority.

Around 50 per cent of firms polled cited insufficient knowledge of digital solutions, a poor understanding of digitalisation's benefits and inadequate employee capabilities among the primary reasons hindering their online efforts.

Ms Joyce Tee, DBS' group head of SME banking, said making available working capital alone is not enough to support SMEs for the road ahead.

"With SMEs starting to focus on building new income streams, banks, industry associations and the Government can step up by offering innovative solutions for enterprises to identify and create new revenue opportunities," she said.

"In doing so, we are helping our SMEs become more resilient so that they are better prepared to ride through the oncoming economic headwinds."

THE BUSINESS TIMES

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on June 06, 2020, with the headline Fewer SMEs report cash flow woes: DBS survey. Subscribe