For businesses facing financial difficulties
Key points:
- If your business is facing financial trouble, you should take action straight away. This will give your business the best chance of getting back on track.
- It’s important to get advice. There are free services that can give you advice about managing your business’s finances.
- If you’re feeling distressed and overwhelmed, contact a mental health support service.
- If you’re a company director and your company is insolvent, do not incur further debt. There could be serious consequences if you do.
Take action straight away
If your business is facing financial trouble, there are steps you can take to get your business back on track.
You should take action straight away. This will prevent your financial trouble from getting worse.
Review your financial records
It’s important to work out what is causing your financial trouble. You should make sure your financial records are up to date and review them to see what debts and cashflow you have. Check if customers or other businesses owe you money.
For information about how to recover money owed to you, see the business.gov.au page on What to do when you haven't been paid.
Get advice
The Small Business Debt Helpline is a free service that can help you manage your financial trouble. Call 1800 413 828 or visit their website.
You should also consider getting advice from an accountant, business adviser or lawyer. You can search for an adviser using the business.gov.au adviser finder.
Contact your bank or lender
Many banks and lenders have a financial hardship team who can talk to you about options for getting out of debt.
To find contact details for your lender’s financial hardship team:
- search for ‘hardship’ on your lender’s website, or
- go to the Australian Banking Association’s financial assistance hub.
Seek support if you’re feeling distressed
If you’re feeling distressed because of your financial trouble, contact a mental health support service. There are services that can help you 24 hours a day, 7 days a week.
For a list of mental health support services for business owners, see business.gov.au:
Mental health and wellbeing support for business
What to do if your business is a registered company
If your business is a registered company, it’s important to comply with your legal obligations as a company director when facing financial trouble. This includes the obligation to act in the best interests of the company and to prevent insolvent trading.
Best interests obligation
Company directors have a legal obligation to act in the best interests of the company. This means they need to consider the interests of employees, creditors and shareholders when making decisions about company assets and money.
If you don’t act in the best interests of the company, you might be liable for breaching the law.
Because of this, it’s important to seek professional business advice as soon as you notice that you are in financial trouble.
Obligation to prevent insolvent trading
Company directors also have a legal obligation to prevent insolvent trading. There can be serious consequences if you allow your company to incur debt when it is insolvent.
If you suspect that your company is insolvent, get professional advice. Contact a registered liquidator, accountant or lawyer as soon as possible.
For more information about what to do if your company is insolvent, see:
Information Sheet 42 Insolvency for directors (INFO 42).
More resources
For more information on what to do if your business is facing financial trouble, see business.gov.au: