❓ Firstly: What exactly is company insolvency?
Answer: In simple terms, insolvency means the company can’t pay it's debts when due.
Business insolvencies are running 75% higher than pre-pandemic levels. Why?
3,450 Australian businesses went under in the June quarter alone. This is more than double the ~2,000 pace of 2019.
☹️ A big chunk of the businesses behind these numbers are single-person operations like trades, contractors and consultants. When a business folds, it's not just a company closing, it's the household income, mortgage, family financial stability.
Cash flow is being squeezed from both ends, from slower-paying clients (46 days average vs 27-day terms) and rising costs (wages, rates, super changes, insurance).
IMPORTANT: If you're self-employed and thinking about your borrowing position, where you stand, it's best to confront it before conditions tighten more. Ignoring these things won't make them go away.
📰 Article source in comment.
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