What Your Business Should Be Doing During a Recession

By Jasmina Mujkic - Aug 05 2020

As expected, it’s happening: Australia is in a recession in the aftermath of the COVID-19 shutdown. It kicked off with a 0.3 percent drop in GDP in the March quarter, but experts say it will only get worse. It’s the first recession in 29 years, with over 2 million Australians either unemployed or underemployed, and billions of dollars spent on government stimulus packages.

While some businesses have benefited from the government stimulus subsidies, for others it is proving to be insufficient as the recession takes effect, particularly since there is no end in sight.  To increase their chances of surviving the recession, businesses need to take control of their cash flow, and debtor finance is a great way to do that.  In fact, in addition to debtor finance, there are several things small and medium businesses should be doing right now to survive the recession.

Take control of cash flow with debtor finance

It is essential to understand where your money comes from and where it goes, both during a recession and during the best of times. Recession or not, debtor finance is a simple and quick way to get access to money you’ve already earned.  

If waiting up to 90 days for your clients to pay is not an option as you have bills to pay and ATO obligations to meet, then debtor finance is a great way to take control of your cash flow by converting your sales invoices into cash. 

How does Key Factors debtor finance work?

  • Invoice your clients for the sale of goods delivered and services rendered.
  • Key Factors will advance you with up to 80% of the invoice value in as quick as 4 hours.
  • Receive the remaining 20 percent less any accrued fees, when your client pays us.

Key Factors have been helping Australian businesses improve their cash flow for over 30 years. There are no lock-in contracts, no quarterly audits, and no minimum volume. Key Factors debtor finance is a “pay as you use” facility, acting as a buffer for any cash flow shortfalls. 

We are transparent about fees so there are no surprises, and our quick online application only takes less than 3 minutes to complete.

Make your current customers a priority and manage key relationships

You’ve already won them over: now focus on keeping them. While you might be feeling panicked about the dip in new customers right now, you can’t neglect your faithful clients, who will be there through the recession and beyond if you take care of them.  Now might not be the time to spend huge marketing campaigns to attract new leads, but leverage off customers who are happy to share positive word-of-mouth advertising.  

Some initiatives to think about are:

  • Pivoting your business to be more suited to your customer’s current needs. As an example, many clothing companies are starting to manufacture masks.
  • Focus on personalised after-sale service. Debtor finance can provide the necessary cash needed to retain employees or extend post-sale support.
  • Diversifying your business to mitigate the impact from the potential loss of a major client. 

It’s human nature to question [business] relationships during this time. Who can I trust and what aren’t they telling me. How do I best ensure that I am compensated for the work I do and how can I keep the wolves from the door as they manage their own doubts and issues? 

Managing those relationships so that you approach situations in a correct manner will be just one part of the puzzle to survival. If you lose the trust in those partnerships on the back of short term rash decisions made in “panic mode”, they might ultimately destroy your reputation and the long term viability of the business anyway. 

Remember what got you to your position of strength prior to the pandemic. Good business fundamentals, such as respect for the needs of your various business stakeholders, paying all debt owed by you in a timely manner, and keeping customers also paying in a timely manner. 

Get Finance Before You Need It


Even if you are cash flow positive right now and don’t think you need any financial support, the current grim economic situation is far from over, and the landscape is changing daily.  

When more businesses start to struggle and apply for loans, banks’ appetite for risks will decrease, and they will get more particular about whom they lend to.  If you leave it too late, you might find your business unable to get finance when you really need it.

Key Factors’ debtor finance application process is simple and you can get approval in as quick as 24 hours, unlike the banks where it could take weeks. 

Create a business continuity plan

Your business continuity plan is an outline of how to prepare for – and recover from a crisis.  The purpose of a business continuity plan is to help you identify and prevent potential risks (recession, natural disaster, pandemic, staff problems, supply chain issues, etc.), prepare for risks that are beyond your control, and respond and recover quickly if an incident or crisis does occur. 

The Queensland government offers a business continuity plan template to get you started. It is also best practice to review and update your continuity plan on a regular basis to ensure you have taken into account any new insights or changes in your industry. 

Start Today

Even if you operate in an essential industry and/or you’ve been fortunate thus far, it’s best to be prepared for the effects of a continued recession. Consider your funding options and put a continuity plan into action to stabilise your business against a weakening economy can ensure your business can come out on the other side. 

As Australia’s leading independently owned debtor finance company, Key Factors has helped companies from a variety of industries like labour-hire, commercial cleaning, business services, manufacturing, and more, to improve their cash flow.  

If you are a business with a high number of customers on accounts and have a monthly turnover between $50,000 to $4 million, you can benefit from Key Factors’ flexible debtor finance.  Contact us today by calling 1300 884 100 or fill out an enquiry form to learn more about our flexible funding solutions. 


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