Good Accountancy and Small Business Restructuring

Insolvency Australia’s Corporate Insolvency Index for FY23 reports that insolvency appointments rose 57% from 1,921 in the final quarter of FY22 to 3,008 in the first quarter of 2023. From this it is clear the predicted perfect storm of Covid cash-flow compression, rapid interest rate rises and an awakened ATO keen to recover underpaid taxes, is upon us.

Recent changes to legislation via the Small Business Restructure Process (SBRP) now allows directors to regain control of their business, property and company, while a restructuring plan is developed to repay creditors and get the business back on track, avoiding the high cost of Administrators.

While Accountants may be best positioned to help their clients through this process, small business owners may not know about the SBR process at all. For mortgage brokers and accountants alike, this burgeoning market demands attention.

As banks transition their lending back to principal and interest repayments, SMEs will face cashflow constraints and may look for equity release solutions to meet ATO and creditor payments. Given the magnitude of mortgage resets due in the next 24 months, these issues are only going to become more prevalent for small business owners.

For professionals who service self-employed and SME businesses, it matters that they understand that banks are not necessarily sympathetic to tax debts and are rarely willing to fund equity release for business use purposes. It is exactly these situations where having a relationship with an established and well-respected non-bank lender, with a track record of working with small businesses, helps.

Semper has maintained a lending record with less than 0.01% in delinquencies and over 60% repeat business since 2009; a record that speaks of strong client support and responsible lending.

Many of Semper’s borrowers transition through a short-term Semper product to repay the ATO, creditors, or fund business growth, then later apply for a longer-term loan because they enjoy a relationship with Semper they used to expect from a bank branch manager.

If you have a client that needs to release equity from real property to meet the needs of creditors or to prime pump business cash flow, give us a call to discuss. For businesses facing mortgages transitioning to P&I loans, we can often offer a cheaper and more tax-efficient alternative.