First Time Administrations July 2024
At Capital Trade Credit Solutions, we like data and the occasional graph.
Last week, ASIC released new statistics on ‘first-time administrations.’
Key Takeaway: Insolvencies have not only rebounded to pre-COVID levels over the past 12 months but are continuing to rise, significantly impacting the construction industry more than any other. No surprises there.
In July 2020, there were 846 first-time administrations. This number dropped to 425 in July 2022, during the COVID-19 period when the ATO was more lenient and everything was slowing down. However, July this year saw a whopping 1,238 businesses enter administration.
Before COVID-19, the annual base level of first-time administrations was around 8,000. If the current trend continues, we could see the annual figure pushing towards 15,000 by June next year. This will have significant implications. Interestingly as of now, trade credit insurance rates remain relatively soft despite these rising figures, which is unusual. This won’t last forever, so if you’ve been considering trade credit insurance, now is a great time to explore your options.
If you’re interested in obtaining a quote for trade credit insurance to protect yourself against future bad debts, please reach out to us.
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