Banjo Loans CEO outlines key strategies for SMEs in 2025

As the festive season approaches, leading non-bank lender Banjo Loans is turning its focus towards the new year and the steps SMEs can take to ensure their success in 2025.

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Banjo Loans CEO Guy Callaghan has shared his “New Year Wish List” aimed at providing essential relief for small and medium-sized enterprises (SMEs) and supporting their growth in the coming year.

The key focus is on a reduction in interest rates to alleviate the financial pressures many businesses are facing.

1. Continued decline in core inflation

With core inflation expected to continue its decline in 2025, SMEs are expected to regain some stability in pricing. This would allow businesses to plan with greater confidence, reducing the fear of sudden, unexpected increases in costs.

“My hope for 2025 is that further reductions in inflation rates will support SME businesses, allowing them to plan with greater confidence and to set prices without the fear of sudden, unexpected increases,” Callaghan said.

This shift could prove crucial in helping businesses navigate the uncertainties of the market in 2025.

2. Government spending: A call for caution

As the federal election approaches, government spending may increase in an attempt to provide economic relief. However, Callaghan urges caution and suggests the government should pause any unnecessary spending into 2025.

“While in the short term, government support might feel beneficial to consumers, increased spending will only serve to exacerbate or negatively affect core inflation,” Callaghan said.

“This will continue to delay much-needed interest rate cuts. For SMEs to thrive, we need a stable economic environment nationally before we consider any additional government handouts.”

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3. Anticipating interest rate cuts in early 2025

With the new year approaching, many SMEs are optimistic about potential interest rate cuts. If implemented early in 2025, these cuts would offer an opportunity for businesses to reassess their financial strategies and invest in growth opportunities.

“If the data trends favourably, a reduction early in 2025 could deliver the relief that SMEs desperately need,” Callaghan said.

“I am hopeful for an interest rate cut early next year, as this would bring some well-needed relief and help SMEs start the year well.”

4. Job market data and its impact on the RBA

The job market will be a key factor in shaping the economic landscape for 2025. Callaghan said that a slowdown in wage growth could ease financial pressures on SMEs and help the Reserve Bank of Australia (RBA) make decisions that benefit the broader economy.

“Job market data is another key focus area for the RBA,” Callaghan said.

“They want to see some of the strength coming out of the market that is driving wage growth and productivity climb. Wage growth continuing to slow will not only please the RBA, but should also please SME business owners and take some pressure off their finances.”

5. Embracing the future: Preparing for 2025

Looking ahead to 2025, Callaghan believes SMEs can set themselves up for success by staying proactive and adaptable.

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“With insights into inflation, government spending, interest rates, and job market dynamics, businesses can better prepare for the challenges and opportunities on the horizon,” he said.

“As we look ahead to the New Year, it’s clear that SMEs must remain agile to face the changing economic landscape.”

As Banjo Loans anticipates a challenging yet promising year for SMEs, Callaghan’s wish list serves as a guide for businesses aiming to position themselves for growth and success in 2025.

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