The troubling rise of SME insolvencies
As home loans become less profitable the banks are shifting attention to business lending. Just as the clouds darken on the credit outlook for the sector.
Like many over the pandemic years I’ve done a lot of working from home. And still do. You get to know your local community, develop your favourite cafes.
So it was a bit of a shock when in recent months two cafes and a couple of shops in our moderately prosperous strip shut. They’d survived lockdowns. And we’re not in a recession.
Asking around, there was no single reason for their demise. One cafe had been enjoying rent relief and when it ended, couldn’t make ends meet. Another found staffing shortages meant closing on a couple of days, which had flow on effects. Rising interest rates was another and cost inflation in general.
And then there was tax. The Australian Tax Office, Australia’s biggest creditor, had shown forbearance during the acute COVID years but is now becoming more proactive in seeking overdue payments.
