Australian SMEs are still pushing forward — but with noticeably less conviction.
New research from Prospa and YouGov shows cashflow confidence has dropped from 70% in February to 60% in May, with the proportion feeling very confident falling from 32% to just 24%. The shift reflects a sector absorbing rising costs, preparing for payday super changes, and now facing the added complication of an upcoming ban on card surcharging.
Prospa co-founder and chief revenue officer Beau Bertoli (pictured) framed the mood plainly.
"SMEs are still moving forward, but they're doing it with less certainty. Costs remain high, and confidence has taken a real step back compared to earlier in the year," Bertoli said.
Margin pressure is already visible in pricing behaviour. Nearly half of SMEs surveyed — 46% — have lifted prices in the past three months to offset input cost increases, while sole traders are carrying a disproportionate share of the strain, with nearly one in five reporting zero cash reserves.
The pattern is consistent with broader business survey data — the NAB Monthly Business Survey for May 2026 recorded business confidence at -14 index points, 18 points below its long-run average, with profitability turning negative and cost pressures remaining elevated.
Payday super: readiness falling behind despite growing awareness
Readiness for the 1 July payday super deadline is actually moving in the wrong direction. While awareness has improved — the proportion unaware of the reform has fallen from 30% to 25% since February — the share of SMEs saying they are not prepared has increased from 19% to 23%, with a further 14% still unsure. Combined, nearly four in ten SMEs remain unready with weeks to go.
One in five SMEs say they have delayed or scaled back planned investments in response to the payday super change. The borrowing implications are also becoming clearer — modelling by Lend shows a 1% cashflow hit from Payday Super can translate into a 7–15% reduction in SME borrowing capacity depending on the lender's model.
The ban on card surcharging, effective 1 October, is introducing a further layer of complexity for the 62% of SMEs that accept card payments.
Among that group, just over half expect the change to affect how they price their goods or services. Most anticipate modest price increases, but 13% say they will need to raise prices significantly. Two in five plan to absorb the additional cost entirely, compressing margins further.
Bertoli said the collective weight of these changes is creating a pattern of cautious, deliberate decision-making.
"The risk isn't just the rule changes themselves. It's the gap between awareness and readiness," he said.
Despite the pressure, investment in new tools continues. Half of SMEs report using AI tools in the past six months, though sole traders remain well behind at 40% uptake compared with 62% for non-sole traders.
"For many SMEs, this period isn't about bold expansion. It's about staying liquid, compliant and flexible," Bertoli said.
With the 1 July deadline weeks away and nearly four in 10 SMEs still unprepared, brokers with small business clients may find cashflow conversations — and working capital solutions — becoming a larger part of their pipeline in the months ahead.
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