Stress in business rarely appears suddenly. Instead, it builds over time, often masked by revenue growth and optimism.
ASIC’s latest data shows many Australian businesses are now feeling the cumulative effects of rising costs, higher interest rates, and ongoing cash flow pressure.
ASIC’s insolvency statistics show that 12,819 companies entered external administration during the first 11 months of 2025-26 financial year, down 4.4% from the 13,413 companies recorded for the same period in 2024-25.
The Top 4 Insolvencies by Sector
- Construction: 3,127
- Accommodation & Food Services: 1,910
- Other Services: 1,256
- Professional, Scientific & Technical Services: 871
Construction and hospitality alone accounted for nearly 40% of insolvencies.
The issue is rarely a lack of work but it’s the inability to convert activity into profit. Cost pressures, tax liabilities, legacy debt, wage increases, and tighter liquidity have exposed business models that no longer hold.
Risk is highest not when conditions look dire, but when they appear normal. Most businesses don’t fail from a single event but from pressure that builds until cash flow tightens and options narrow.
For directors, the takeaway is simple: act early to preserve options. Waiting for the next BAS quarter, or customer payment can be costly if underlying economics have shifted.
A Note for Directors
If your business is experiencing:
- Growing ATO liabilities
- Ongoing cash flow pressure
- Difficulty meeting creditor arrangements
- Overdue superannuation
- Concerns about viability
Now is the time to seek advice.
Early action creates more flexibility whether through refinancing, restructuring, or an orderly wind-down.At Charles & Co, we do not view restructuring as failure. We view it as risk management under adversity.
At Charles & Co, we help directors
How can Charles & Co. help you?
Our Team with more than 50 years combined experience can help businesses and individuals in a range of challenging and distressed situations. We encourage anyone experiencing financial or operational distress to contact us to discuss your options.