Beginning of Financial Year 2026: A chance for SMEs to reset and plan for success
Leading non-bank lender Banjo Loans is urging small to medium businesses (SMEs) to take five key actions before June 30, in order to better position themselves for success in what looks to be an ongoing challenging economic environment in FY2026.
In FY2025 many of Australia’s small and medium businesses (SMEs) were forced into survival mode, according to Banjo Loans CEO Guy Callaghan.
Callaghan says large falls in consumer confidence and consumption, stubbornly high inflation, high interest rates and global economic uncertainty combined to create a perfect storm of business headwinds.
Further, as revenue slowed and support decreased, most notably with the removal of the $20,000 instant asset write-off, SMEs are feeling the pinch and looking for ways to move forward.
Despite the turbulence of the financial year that was, Guy Callaghan outlines Banjo’s five key priority actions for SME businesses to move forward, stabilise, manage cash flow and continue building with confidence into FY2026:
- Take Advantage of Financial Support for SMEs
In the past, government support has been a lifeline for small businesses, especially given the pressures of inflation and rising costs. For example, the $325 rebate on electricity bills that was available last year made a difference for some SME businesses. It’s essential for SMEs to stay informed about financial relief options such as rebates, grants and other support measures that are available in FY2026.
“If cash flow is a challenge for your business, make sure to leverage these financial support initiatives,” Callaghan said.
“These supports can help you manage operational costs and free up resources to focus on long-term growth.”
- Complete the Shift to Digital Payments
With the phase-out of cheques by 2030, yes they still exist, Banjo encourages SME businesses to prepare as business fully transitions to digital payments. Many businesses still need support with this shift and there are grants and resources available to help with the adoption of digital payment systems.
“Moving to digital payments isn’t just about keeping up with industry standards, it can dramatically help improve business efficiency and deliver better cash flow management,” said Callaghan.
“Explore resources that can assist you with this transition and take advantage of Open Banking to gain more control over your financial data. These systems will give you better visibility and make it easier to manage your cash flow.”
- Manage the cost of lending
Despite recent drops in interest rates, borrowing remains expensive for many businesses. As SMEs continue to face high borrowing costs, it’s essential to look for ways to manage these expenses.
“SMEs are feeling the strain of high borrowing costs, and many are cutting costs to offset inflation and higher interest rates,” said Callaghan. “If your business relies on loans to fuel growth or manage cash flow, consider exploring low-interest loans or restructuring options with your lender. Refinancing could also help reduce your interest burden. Look for lenders that take the time to understand your situation”
- Invest in Innovation and Workforce Development
As the market evolves, it’s essential for SMEs to stay competitive by embracing new technology and investing in their people. Our latest SME Compass report showed SMEs are conscious of just how important workplace development is in achieving success. It found that 63% of businesses plan to prioritise employee well-being and 46% plan to expand their workforce in the coming year.
“Staying agile and innovative is key to long-term growth,” Callaghan said.
“I would encourage SME business owners to invest in upskilling your staff, while at the same time adopting any new technologies that can help improve your operations. Whether it’s through training programs or adopting the latest technology, keeping your team well-equipped and your business innovative will ensure you can respond quickly to market changes.”
- Stay Compliant with Wage Theft Legislation and Fraud Management
Mid-way through FY2025, wage theft became a criminal offence, which, while important, can add pressure to SME business owners, who need to stay vigilant in ensuring their payroll processes are compliant with the new regulations.
“The wage theft laws mean businesses must be more diligent with payroll, and that comes with its own challenges,” Callaghan said.
“To avoid penalties, ensure you’re up to date with the Voluntary Small Business Wage Compliance Code. There are resources and training available to help you stay on track, so make sure you take advantage of them.”
Fraud and financial crime also remain a key priority with doctored financial information, fake invoices, phishing emails and other online scams as continuing to grow in scope and complexity.
“We continue urging SMEs to be vigilant around fraud detection, keeping an eye on any fake invoicing or fraud risks and reporting any suspicious or fraudulent activity you might see. Research on fraud detection software that may be suitable for your business,” said Callaghan.
Final Tip: Plan and Review for Success
As we move into BOFY2026, we would encourage SME businesses to take the time to review any business plans, reassess your financials and identify areas in your business where you can actively and realistically drive growth. With ongoing challenges, it’s crucial to be proactive and strategic about your business direction.
“Review your financials, plan your growth strategy, and ensure your business is ready for what FY26 has in store. Make sure you have a base case, stretch and Armageddon plan,” Callaghan said.
“By taking action now, you’ll position your business for success, or sometimes survival, in the year ahead.”
