Financial hardship - help is at hand

The cash flow crisis has hit small businesses hard. Amid rising costs and reduced consumer spending, many businesses are struggling to meet their short-term obligations, let alone plan for growth.  

In fact, cash flow remains one of small businesses’ top concerns according to the Commission’s July 2025 Momentum Survey, with approximately 73 per cent expressing concern. 

Cash flow issues are often the first sign of financial stress. If left unaddressed, they can quickly escalate into mounting debt and, in the worst cases, insolvency. 

Unfortunately, the number of business insolvencies have increased significantly over the past two years: In 2024-25, a record 5,692 companies in NSW entered external administration or had a controller appointed, surpassing the previous record of 4,635 in 2023–24. CreditorWatch data indicates that business insolvencies have plateaued at historically high levels, with the construction and hospitality sectors remaining particularly affected. 

If your business is experiencing financial difficulty, it’s important to know that support is available. The following are some key resources that can help:  

The National Debt Helpline: The National Debt Helpline is a free, confidential service that connects you with professional financial counsellors who offer guidance on what you should do if you are experiencing financial hardship.  

The Commission's mediation service: The NSW Small Business Commission's mediation service provides personalised support to your business if you are facing financial hardship as a result of a dispute. 

Financial institutions and banks: Most financial institutions have specialised hardship teams that can assist their customers in dealing with difficult situations. There may be practical ways that you can move out of financial difficulty, which your bank’s team can discuss with you. Find your bank and their hardship team contact details here. 

Debt agreement: If you are a sole trader or in a partnership, you may be able to create a debt agreement as a flexible way of settling debts before bankruptcy. This option will require the majority of creditors (those who you owe money to) to agree. 

Temporary relief period: Temporary debt relief could also be an option, where a 21-day period will be given to a business where a creditor has a court order for payment. The 21 days allow you time to restructure your finances and consider all your options of payment. 

Liquidator or lawyer: You should note that if you are trading insolvent (as opposed to short term financial hardship), you could face civil penalties and even criminal charges. You may wish to seek professional support from a liquidator or lawyer. 

For more information, see Experiencing financial hardship: Where to get help