Regular cashflows could return within five months

covid-19/CreditorWatch/

3 August 2020
| By Chris Dastoor |
image
image
expand image

Almost half of businesses think they could be back to pre-COVID-19 cashflow levels within five months, according to a report from CreditorWatch.

According to ‘The Economic Long Road Ahead: CreditorWatch Perceptions and Insights’ report revealed the heath of Australian businesses but urged those struggling to seek help now rather than waiting.

Patrick Coghlan, CreditorWatch chief executive, said the report highlighted that some businesses were ready to be “weaned” off Government support.

“Support packages like JobKeeper have provided businesses with an essential lifeline since March, but the reality is, that they aren’t long-term solutions,” Coghlan said.

“Our survey data shows that 44% of businesses think they could be back up at pre-COVID cash-flow levels within five months, which means that it’s time for the government to think about lifting support and allowing businesses to stand – or fall – on their own two feet.”  

The report also showed a slowing path to administration with a 23.1% drop in the number of businesses entering administration over the last quarter.

This was not only due to business being propped up by government support, but also because court closures had delayed administration proceedings, as well as the lenient approach taken by creditors recently.

“The number is down 36% year-on-year – equal to 1,200 businesses that in normal times, would have entered into administration. The reality is that many are synthetically propped up, so at some point, insolvencies will rise,” Coghlan said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 5 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND