Prospa warns of massive SME cashflow pressures as super changes kick in this year
Prospa is the latest SME specialist to raise the alarm bells over upcoming payday superannuation changes.
From 1 July, all employers, including small business owners, will be required to pay employees’ super contributions at the same time as their wages. It will replace the current system of paying super contributions quarterly.
While the changes sound benign, “this is expected to substantially impact small business cashflow at a time many business owners are still feeling the pressure from higher inflation”, says Prospa.
The non-bank lender recently released the Prospa SME Sentiment Report in partnership with YouGov.
It found that nearly a third of SMEs are completely unaware of the changes, while 11% are aware, but lack a proper understanding of what the changes entail.
Of the SMEs that are aware of the payday super changes, nearly a fifth said they are unprepared, while 14% are unsure if they can make the new payment schedule.
These are alarming statistics, considering that 30% of SMEs only have one month or less of expenses in reserve and 14% have no reserves at all.
“The compliance changes to payday super will have a massive impact on SMEs’ cashflow,” says Prospa chief revenue officer Beau Bertoli (pictured). “For businesses with thin buffers, moving super payments forward compresses working capital. The risk isn’t the rule itself; it’s being caught unprepared and being non-compliant.”
Bertoli’s comments echo those of Bizcap chief revenue officer Rebecca del Rio.
“It's one of those changes that sounds really administrative on the surface, but the reality is it's going to be a major cash flow shift for Australian SMEs,” del Rio recently told MPA. “I think SMES should be really planning now.”
SaaS platform Lend warns that SMEs could see their borrowing capacity reduced by as much as 15% when the new rules kick in.
Bill Baker, chief executive of Lend, believes the shift will flow directly into lender assessments of SME cash flow.
“Under the quarterly system, unpaid super effectively sat inside the business as a short-term liquidity buffer,” he says. “That meant bank statements often showed higher average balances, stronger month-end positions, and more headroom in offset and redraw accounts. Lenders use all these inputs in their serviceability and risk models.”
Hesitation, not apathy
While 70% of SMEs polled in the Prospa SME Sentiment Report say they are confident that they can remain cashflow positive over the next 12 months, businesses hold only 2.7 months of expenses on average, leaving little margin for error.
“Cashflow planning is going to be key for businesses. If you don’t have or can’t create the reserves to fund this new change it’s time to plan a funding line to support your cashflow through this change,” says Bertoli.
The research also shows that SMEs are being conservative with their end of financial year (EOFY) investment decisions.
Despite the $20,000 instant asset write-off being available until 30 June, only 18% of SMEs plan to purchase eligible assets, 29% are unsure, and nearly 5% mistakenly believe the scheme has ended.
“What we’re seeing is hesitation, not apathy,” Bertoli says. “Businesses aren’t saying no to investment – they’re stuck deciding when and in what order. When cash is tight and obligations are moving faster, sequencing matters.”
Amid tight business conditions and overlapping business expense pressures, SMEs are increasing their reliance upon external funding.
More than a third of SMEs plan to access external finance in the next 12 months, up from 31% in September 2025, with an average borrowing amount of around $23,200.
“For many SMEs, this year isn’t about bold expansion – it’s about staying liquid, compliant and flexible,” says Bertoli. “The businesses that plan early, model their cashflow properly and get advice will be in the strongest position to invest when the timing is right.”
How brokers can help
Despite the hesitant investment appetite in the SME space, Roberto Sanz, general manager of sales and partnerships at Prospa, believes that diversification isn’t just timely for brokers, "it’s necessary".
He says: "This is a strong case for diversification into SME and commercial finance. Not as a growth play only, but as a way to stay relevant to clients whose needs are becoming more operational and cash‑flow driven."
Payday super changes represent a great entry point for brokers seeking to diversify their business output.
"The opportunity is already there, brokers just need to ask the right questions," says Sanz. "Rather than leading with products, brokers can lead with conversations about payroll timing, cash buffers and upcoming obligations."
Therre are three critical things brokers can do to help their SME clients through the upcoming changes.
- Lift awareness: Particularly for the 41% of SMEs who either do not understand the change or are not aware of it at all
- Strengthen liquidity and cash‑flow planning: Eespecially for businesses holding less than three months of cash reserves.
- Match funding solutions to real operating needs: Including products that provide flexible, on‑demand access to capital.
"With one in three SMEs already expecting to seek external funding, brokers who connect payday super to real‑world cash‑flow planning – rather than treating it as a standalone compliance issue – will deliver far greater value and position themselves as trusted, long‑term advisers," says Sanz.
