Business insolvencies have surged to their highest level in nine years, according to credit bureau Equifax. In the March 2024 quarter alone, insolvencies were up 41.1% compared to the same time in 2023, marking a level not seen since 2015.

While this trend is a concern for business owners across Australia, it also serves as an important reminder: staying financially proactive is essential, especially in a tightening economy. At Peel Finance Brokers, we work closely with business owners to strengthen their financial position and avoid becoming part of these statistics.

Why Are More Businesses Closing?

Several challenges are placing increased pressure on Australian businesses:

• Higher interest rates are raising the cost of borrowing
• Operating costs and wages are continuing to rise
• Consumer spending has softened across many sectors
• Temporary pandemic-related support has now ended

Small and medium-sized enterprises are particularly vulnerable, as many run on tight margins and lack the cash reserves to ride out prolonged downturns.

What Help Is Available from the ATO?

The Australian Taxation Office (ATO) is urging business owners to take early action if they’re falling behind on tax obligations. Ignoring tax debt can lead to escalating costs and formal recovery action. If you’re unsure where to start, speak to a professional or reach out to the ATO directly.

There are support options available:

Payment Plans

If you owe $200,000 or less, you may be able to arrange a payment plan online. For larger debts, direct engagement with the ATO or your tax professional is recommended.

Interest Charge Relief

The ATO may remit the general interest charge (GIC) on overdue amounts, depending on the circumstances and how quickly you’ve acted to resolve the issue.

Recognise the Warning Signs Early

Financial stress can build slowly, and by the time it becomes urgent, your options may be limited. If your business is struggling with cash flow, loan repayments, or ATO debt, now is the time to act.

Some early red flags include:

• Regularly late supplier payments
• ATO debt you’re unable to reduce
• Reliance on short-term borrowing to meet basic expenses
• A drop in net profit despite steady revenue

If any of these sound familiar, it’s worth exploring whether refinancing, restructuring, or seeking new finance options could help.

How a Finance Broker Can Help

Our team works with businesses across WA to provide tailored lending solutions that support long-term sustainability. We can help you:

• Refinance or restructure existing business debt
• Access working capital or flexible finance facilities
• Improve cash flow with the right loan structures
• Navigate complex lending environments with confidence

We take a personal, hands-on approach, working with you to understand your situation and matching you with financing that fits your needs and goals.

Insolvency doesn’t happen overnight, and it isn’t inevitable. With the right financial strategy and guidance, you can take control before things spiral. If you’re concerned about rising costs or financial pressure, contact Peel Finance Brokers today. We’ll help you explore the right solutions for your business before it’s too late.

Related posts:

• Navigating Business Financing Options During Economic Downturns in Western Australia
• Ultimate Guide to Financing Your Business Start-Up in Mandurah
• How to Recession-Proof Your Business