New lifeline for small business owners facing financial stress

Small business owners struggling to keep up with debt repayments have been given a lifeline with the release of a new support-based fact sheet, developed by the Australian Banking Association (ABA) in collaboration with Chartered Accountants Australia and New Zealand (CAANZ), CPA Australia (CPA), and the Australian Taxation Office (ATO).

This initiative aims to provide practical guidance for those feeling the financial pinch, especially amid the rising cost of living.

The fact sheet builds on the ABA’s ongoing campaign that urges small business owners not to ‘tough it out on their own’ if they are facing financial difficulties. ABA CEO Anna Bligh emphasised the importance of seeking help early.

“If you’re feeling stressed about your finances or existing debts, seek help from your bank, accountant, or a financial counsellor right away. For any debts you have with the ATO, get in touch with them early on so they can work with you on managing the debt,” Bligh said.

Support for small business

The fact sheet outlines various support options available to small business owners, including negotiating payment plans with banks and the ATO, improving cash flow management, and restructuring debt. The ABA and its partners are encouraging small business owners to take proactive steps to address their financial challenges before they become overwhelming.

Anna Bligh further acknowledged the current economic pressures that are hitting small businesses particularly hard. “Our small businesses are incredibly resilient, but banks want customers to know they are not alone if they feel like they are struggling to make repayments,” she said. “Don’t be afraid to contact your bank as soon as possible. They have specialised teams ready to help, and the sooner you get in touch, the sooner your bank can review your circumstances.”

ATO lends a helping hand

The ATO is also playing a key role in this initiative, urging businesses to engage early to avoid falling further behind on tax obligations. ATO Assistant Commissioner Anita Challen stressed the importance of early action. “We want to work with businesses to help them get back on track with paying their tax debts,” Challen said. “For small businesses who need support, there are a range of support options available. We encourage small business owners to reach out to the ATO or a trusted advisor early to identify options that may help their business remain viable.”

Chartered Accountants Australia and New Zealand (CAANZ) CEO, Ainslie van Onselen, echoed this sentiment, encouraging small business owners to seek advice at the first sign of financial stress. “Chartered accountants have the expertise to help your small business find the best path forward, from looking at your business structure to identifying cash-flow improvements and helping manage outstanding debt,” van Onselen said. “In a cost-of-living crisis, having a chartered accountant in your corner supporting your business is a great way to manage through economic and financial pressures.”

Seek support

Chris Freeland, Chief Executive Officer of CPA Australia, also highlighted the critical role that small businesses play in the economy and the importance of seeking help when needed. “Small businesses are an essential part of our economy, and millions of enterprising Australians live and breathe their business,” Freeland said. “This is great when things are going well, but circumstances can change quickly and leave small business owners feeling overwhelmed and under pressure, particularly when dealing with their finances.”

Freeland emphasised that informed decision-making and solid financial advice are crucial to the survival and growth of any business. “Understanding the overall position of your business, including managing your debts and tax obligations, is critical to survival and growth. When you need help with debt, seeking support becomes your next good business decision,” he added.

The new fact sheet serves as a resource for small business owners, offering clear steps to take when financial difficulties arise. By working closely with banks, accountants, and the ATO, small business owners can gain a better understanding of their options and make more informed decisions, ultimately helping them to navigate through challenging times.

For more information, check out the small business fact sheet

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