14,152 companies went insolvent last financial year, and the most common cause was cash flow
What ASIC's insolvency figures say about why Australian companies fail: more than 14,000 entered external administration in 2025-26, most of them small, and inadequate cash flow is the cause administrators name most often.
- 14,152 companies entered external administration for the first time in 2025-26, on ASIC's figures. That was slightly fewer than the year before, not more.
- Most were small. Where administrators recorded staff numbers in 2024-25, about 95% had fewer than 20 full-time employees.
- Inadequate cash flow is the cause administrators name most often, in 57% of their reports.
- Construction and accommodation and food services had the most insolvencies, again.
The figures behind the video, and where each comes from
- 14,152 companies. Companies entering external administration or having a controller appointed for the first time in the 2025-26 financial year, from ASIC's Series 1 insolvency statistics. ASIC's latest file revises it to 14,153. The year before was 14,722, so the total eased slightly.
- About 95% with fewer than 20 staff. From the reports external administrators lodge with ASIC (Series 3, 2024-25, the latest year published). Of the 7,764 reports that recorded company size, 7,371 were companies with fewer than 20 full-time employees. Counting reports where size was not known, it is more than three in four.
- Cash flow, the most common cause. "Inadequate cash flow or high cash use" was nominated in 56.8% of administrators' reports in 2024-25, ahead of poor strategic management and trading losses. It has been the top cause for at least three years running.
- Construction and hospitality hit hardest. In 2025-26, 3,472 construction companies and 2,078 in accommodation and food services entered external administration, the two largest industries by number.
Why cash flow, and not profit, is what usually runs out
A small company rarely fails on the day it stops being profitable. It fails on the day a bill falls due and the money to pay it is not there. Construction and hospitality show why: builders carry wages and materials for weeks before a progress claim is paid, and hospitality runs on thin margins with costs that do not pause in a quiet month. A payment that arrives sixty days late can do more damage than a bad quarter.
Where a property-secured loan fits, and where it does not
If the problem is timing, with money owed to the business, a sale under way or a refinance coming, borrowing against equity in real estate can carry the business to that date. That is the "talk to a lender who looks at the whole picture" in the video: the assessment rests on the property, the purpose and the exit, not on the last few months of bank statements that a cash flow problem has already damaged. If the problem is that the business loses money, a loan only makes the hole deeper, and the right first call is an accountant or an insolvency adviser.
Read the transcript
14,152 companies went insolvent last financial year. Almost 95% had fewer than 20 employees. The most common cause, cash flow. Construction and hospitality were hit hardest. If a bank's no is all that stands between you and the next contract, talk to a lender who looks at the whole picture. HomeSec Business Finance, Australia's fastest and most flexible business loans.
Transcribed from the recording's own captions. The figures are ASIC's: the total and industries are for 2025-26, and the staff numbers and causes are from administrators' reports for 2024-25, where company size was known. Sources and qualifiers are listed above.
Questions people ask next
Does running out of cash mean the business was not viable?
What are the early signs a company is heading into trouble?
Can borrowing against property stop an insolvency?
The video is the short version. The written guide has the detail: a business cash flow crisis: where to start.
To talk it through about your own property, ring a Lending Manager on 1300 93 83 87, Mon–Fri, 8:30am – 5:30pm Melbourne time.
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Reviewed by Jason Brockmuller, Joint Chief Executive