Work out which problem you have before you decide what to do about it
"Cash flow crisis" covers a dozen different situations with different deadlines, different consequences and different right answers — and several of them are not a loan. This page sorts them. Some of the links go to pages that tell you to call somebody other than us.
A Director Penalty Notice runs for 21 days and cannot be reopened afterwards. A statutory demand runs for 21 days, and failing to comply creates a presumption that the company is insolvent. An ATO intent-to-disclose notice runs for 28 days. A winding up application has a hearing date and changes what you can do with company property from the moment it is filed. Fixed dates beat everything else on your list today.
Which one is yours?
| What has happened | What it means |
|---|---|
| A letter from the ATO with a deadline on it | A Director Penalty Notice gives 21 days and makes the debt personal. A garnishee notice redirects money before it reaches you. An intent-to-disclose notice gives 28 days before the debt goes to credit bureaus. |
| A statutory demand or a winding up application | A statutory demand gives 21 days. A winding up application is a court proceeding with a hearing date. Both need a solicitor today, not next week. |
| Payroll is due and the money is not there | Wages, PAYG withholding and superannuation all have separate consequences, and the order you pay them in is a legal question as well as a practical one. |
| A supplier has stopped supply | This one stops the business trading rather than costing it money, which makes it more urgent than its size suggests. |
| The bank has called the facility | Usually a portfolio decision rather than a judgement about you. There is more room to negotiate the deadline than most borrowers assume. |
| A customer has failed owing you money | The loss is the invoice plus everything you spent producing it, and the forward revenue you were counting on. |
| The BAS is due and cannot be paid | Lodge it anyway. Lodging and paying are separate obligations with separate penalties, and not lodging costs you the cheapest option available. |
| A claim has been certified and not paid | Common in construction and subcontracting, and there is a statutory process that runs on short timeframes. |
The question that decides everything
Is the problem the timing, or the total?
| Timing | Total | |
|---|---|---|
| What it looks like | The work is done, the money is coming, and the dates do not line up. | Debt accumulated over years that trading profits cannot service, whatever happens next quarter. |
| Typical causes | A debtor at 60 days, a claim in dispute, a season, growth consuming cash, a settlement that moved. | Losses on every job, a lost contract that carried the overhead, an ATO balance that has compounded for years. |
| What fixes it | Funding the gap until the money arrives. | Compromising the debt, or changing what the business does. |
| What borrowing does | Solves it. | Postpones it, larger, with your property now attached. |
| Who to call | Your accountant, then a lender. | Your accountant, then a registered liquidator. |
We decline files in the right-hand column, and we would rather say so in the first ten minutes than take a commitment fee. If that is the column you recognise, small business restructuring is the page worth reading, and it explains a process we have nothing to do with.
This week, in order
- 1Deal with anything that has a fixed date on it.Statutory deadlines do not move for good reasons, and several of them close permanently.
- 2Separate what is due this week from what is due this month.Most cash crises feel larger than they are because everything is in one pile. The week's number is usually much smaller and much more solvable.
- 3Ring your three largest debtors personally.The person who authorises payment, not the accounts inbox. A material share of overdue invoices are sitting in an approval queue that a phone call clears.
- 4Call your accountant before you decide who gets paid.The order matters legally as well as practically, particularly where PAYG withholding and superannuation are involved.
- 5Talk to creditors before they chase you.A supplier asked for time will often give it. A supplier who finds out by chasing rarely does.
- 6Price the funding option properly, rather than as a last resort.One phone call, an indicative figure, no commitment. Knowing what it would cost is how you compare it against everything else — including doing nothing.
If borrowing is the answer
We lend $20,000 to $5,000,000 against equity in Australian real property for business purposes, with no financial statements, no tax returns, no valuation, no serviceability test and no credit score threshold. Defaults, arrears, an ATO balance and unlodged returns are all common on the files we write. Funding is as little as 24 hours from a clean, complete scenario, and the first six months can carry no repayments at all — which for a business in this position is usually the feature that matters most.
That's the HomeSec Advantage.
Questions people ask at this point
My business has run out of money. What do I do first?
How do I know whether to borrow or to restructure?
Is it too late to do anything?
Who should I call first — an accountant, a lawyer or a lender?
Can I get a loan if my business is already behind on things?
What if I have no property to offer?
Will borrowing just delay the inevitable?
See if you qualify in sixty seconds
Three short questions, no credit check to apply and no financial statements. A Lending Manager reads it and calls you back with a real answer — not a call centre, not an algorithm.
That's the HomeSec Advantage.
Tell a Lending Manager what has happened and what property sits behind you. If we can help you will know roughly what is available before you hang up, and if we cannot you will know that too, which is worth something on a day like this. 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
Reviewed by Jason Brockmuller, Joint Chief Executive