Regular cashflows could return within five months
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.
AUTHOR
Chris Dastoor
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
