Businesses are increasingly seeking help from insolvency experts as the economy bites

A steadily increasing number of Queensland businesses are “being squeezed from both ends” and seeking help from insolvency experts. FULL LIST OF COLLAPSES

An increasing number of Queensland businesses “being squeezed from both ends” are seeking help from insolvency experts before going into administration or liquidation.

While Australian Securities and Investments Commission statistics rise and fall dramatically every month, managing partner at WCT Advisory Group Andrew Weatherley said inquires from businesses were “steadily increasing”.

“We’ve had quite a high level of inquiry in September,” he said.

“Most of the industries we see are still construction related and there has been a rise in cafes and kitchens and other food related businesses.

“The cost of living increases have generally seen businesses having to pay more for input and people have less money to spend. So they are being squeezed at both ends.”

According to ASIC there were 68 Queensland administrations and liquidations in September, down from 87 in August, a 22 per cent fall. The September figure was 14 per cent less than the 79 in September 2022.

However, the August figure was 26 per cent higher than July and 55 per cent more than the same month in 2022.

Some of the businesses that went into liquidation in September include was Schaumkell Access & Scaffolding Pty, Harmis Concreting and Steel Pty Ltd and Fitville Pty Ltd trading at Fitstop Jindalee.

Mr Weatherley said there were concerns over possible interest rate rises which will impact heavily on businesses.

“It will make everything harder for a majority of people. It will be interesting to see how things pan out over the Christmas holidays,” he said.

“I expect retailers will be worried about how they are going to go over Christmas.”

Master Builders Queensland chief executive Paul Bidwell said that while the predicted tidal wave of insolvencies had not eventuated, building firms were still feeling the pain from the pandemic.

“There is still a hangover from the previous few years when builders were hit by the rising cost of materials and labour on fixed-price contracts,” Mr Bidwell said. “These issues caught out a lot of builders and they just did not have the resources to keep going.”

Builders under pressure.

Revive Financial head of business restructuring and insolvency Jarvis Archer said he spoke with a builder last week who, unlike many others, had honoured his fixed-priced contracts.

“But when costs rose in 2021 and 2022, he paid for it,” Mr Archer said.

“His company’s financials show he lost $400,000 last year and $190,000 for the current financial year. Some of his contracts took two years to finalise.

“Although he put in personal money to support his company, it has accrued nearly $1.5m of debt. This includes a $500,000 ATO debt, $150,000 in high interest loans and credit cards.

“Unless he has a much better year, or puts in more personal funds, the company’s future is troubled.”

Originally published as Businesses are increasingly seeking help from insolvency experts as the economy bites