By Kirk Cheesman, Managing Director, NCI
With COVID-19 and the measures imposed to
“We expect to see escalating late payments by
combat its spread freezing cash flow across
businesses and declining levels of communication
large expanses of Australia’s economy, assessing
with creditors,” Mr Cheesman said. “There will also
insolvency risk has never been more critical or
likely be an increase in court actions, referrals to
more difficult.
debt collection agencies, and wind-up actions.”
Helping businesses stay afloat until Australians
Mr Cheesman cited increasing levels of insolvency
can spend or trade confidently again has involved
in the Retail, Building and Construction sectors,
relieving buyers of a range of insolvency-related
the impact of recent bush fires on agriculture-
obligations while at the same time curbing lenders’
related industries and COVID-19’s devastating
and suppliers’ rights.
effect on a wide range of industries such as tourism, travel and hospitality as key areas of
Repayment thresholds have been raised, defaulters
concern.
can now sit on a statutory demand for up to six months and directors can trade while insolvent for
Mr Cheesman advised credit professionals to
six months with little to fear.
beware of companies that lose projects and make staff redundancies.
Kirk Cheesman, from leading trade credit insurance broker NCI, is ideally placed to see the trends
“Both domestically and globally, late payments,
in insolvency risk emerging from this radical, if
insolvencies and bankruptcies have been
temporary, change in the commercial landscape.
increasing,” he said.
Claims
17
Analysis & Commentary
Collections
Reductions
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
Q3 2018
Q2 2018
Q1 2018
Q4 2017
Q3 2017
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 2015
Q1 2015
Q4 2014
Q3 2014
Q2 2014
Index Breakdown
Q1 2014
Q4 2019
Q3 2019
Q2 2019
Q1 2019
Q4 2018
“There’ll also likely be an increase in court action, debt collection actions and wind-up actions” Q3 2018
Q2 2018
Businesses must adapt in changing economic times
Overdues
AICM Insolvency Risk Report 2020
