Whilst collection and insolvency actions have been approximately half of a “normal” year over the past 20 months, the number of businesses in financial difficulties is building up.
Now that government support (i.e. Jobkeeper) is gone and recent lockdowns impaired cashflow further, the number of business insolvencies is bound to come bubbling to the surface.
In a further sign of disruption, the ongoing price increases on raw materials and finished product are eroding the profit margins of contracts committed to previously. In the building sector, costs of materials (in particular Timber and Steel) and the increased demand, have not only had a major impact on the cost of a new build, but time frames for a build have blown out dramatically.
In a recent case in Queensland, Privium Group failed owing millions of dollars to creditors. Many suppliers held credit insurance cover via NCI and in the main, will receive approximately 90% of the debt back. Click HERE for our case study.
Jeff George, NCI’s Head of Risk & Group Services said of the recent Privium collapse “this will sadly leave a horrendous toll on sub-contractors and a trail of destruction behind it. We are busy assisting numerous clients with their claim submissions so we can protect their liquidity and cash flow by promptly restoring liquid funds back into their business – one of the many benefits of insuring your receivables.”
On behalf of the team at NCI, I would like to wish all our clients, business partners and friends a happy holiday period and best wishes for the new year.
Kind regards
Kirk
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