More small firms expected to seek external funding as trading period begins
Many small businesses are heading into the summer and end‑of‑year trading period with limited cash reserves and greater reliance on external funding, according to new research.
The latest Prospa SME Sentiment Report shows that around seven in 10 small business owners expect to remain cash flow positive over the next 12 months.
At the same time, 15% report having no cash reserves, up from 13% in April, while a further 15% hold less than one month’s buffer.
“It is great to see that most business owners are optimistic about the next 12 months,” said Beau Bertoli (pictured right), co-founder and chief revenue officer at Prospa. “As a former SME owner myself, you need that resilience and positivity to succeed.
“However, with nearly a third of owners reporting they have a month or less cash in reserve, barely enough to get through a single quarter’s downturn, we are worried about their ability to manage the costs and demand fluctuations of summer.”
Customer data from Prospa indicates that small firms are entering the critical trading window with lower average monthly revenue than last year. In 2024, businesses recorded average revenue of $131,000 in September and $111,000 in August. In 2025, the figures fell to $112,000 and $98,000 respectively, with July declining from $111,000 to $107,000.
Across the first quarter of FY25, the average monthly revenue was $118,000, compared with $105,000 in the first quarter of FY26, a change Prospa describes as a 13% decrease. The trend suggests some SMEs may be starting the summer period with weaker turnover, limiting their capacity to absorb higher operating costs or invest in additional stock and staffing.
The data also point to volatility later in the year. Prospa reported that average monthly revenue rose from $102,000 in October 2024 to $126,000 in October 2025, before dropping from $134,000 in November 2024 to $107,000 in November 2025.
For mortgage and finance brokers working with SME clients, the combination of thinner cash reserves and uneven revenue may signal increased demand for short‑term working capital, refinancing, or restructuring of existing facilities as businesses attempt to manage outgoings through the holiday period.
The YouGov research also highlights a growing intention among small businesses to seek external funding. Nearly one in three (31%) SMEs expect to access finance, a rise of five percentage points on the previous reading.
“Summer can be an exciting time for small businesses, offering new opportunities,” Bertoli said. “However, many are working with slim cash reserves and facing lower monthly earnings, making them more susceptible to even small economic surprises.
“Business owners who find themselves in this situation or feel uncertain about their cash flow might find it helpful to chat with their trusted adviser. Together, they can explore options to make the most of this summer.”
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