Unlike the recession of the 1990’s, the banks seem to see the appointment of an Insolvency Practitioner to a troubled business as a last alternative rather than the first.

Banks generally prefer to work with clients if it is felt the financial difficulties are short term due to the current conditions.  The Tax Office is also supportive, particularly for GST and PAYG concessions.

In the SME sector if the business has a solid core business the banks will work with the business to try and find a successful outcome.  This is all predicated around the business being able to show the bank the extent of their difficulties and their plan for recovery.

Businesses who are not able to do this will not be supported by the banks.  It is therefore more important than ever for businesses to keep their accounts up to date and ensure they are accurate.  A business that does not do this and then falls on hard times will find it difficult to convince their bankers that they are worthy of support.