Australian businesses are operating in a difficult environment. Costs have risen, economic growth has been weak and creditors are becoming more active when debts go unpaid. Company insolvencies are now 75% higher than before the pandemic, according to the Australian Industry Group. There were 3,450 insolvencies in the June quarter and 14,150 over the 2025–26 financial year, compared with around 2,000 a quarter before the pandemic.
More recent data suggests the pressure has not eased. Alares Credit Risk Insights reported that insolvencies in August exceeded the same month in 2025, the first year-on-year monthly increase since February. Winding-up applications reached another monthly high, while more than 37,000 businesses were subject to Australian Taxation Office (ATO) tax debt reporting.
If your business cash flow is under pressure, figures like these may be confronting. But a cash-flow problem does not automatically mean your business is insolvent. The more useful question is whether you are dealing with a temporary timing gap or a deeper financial problem.
Why are more businesses under pressure?
Australian Industry Group points to weak economic conditions and rising costs as major sources of pressure. Since 2024, Australia has experienced its longest period of low economic growth since the 1990s and its longest period of high inflation since the early 1980s. Both have put pressure on business balance sheets.
The impact is being felt across several industries. Construction recorded 3,472 insolvencies in 2025–26, up from 1,515 in 2018–19. Accommodation and food services, retail, manufacturing and professional services have also recorded substantial increases.
At the same time, the Australian Taxation Office has become more active in pursuing unpaid tax debts. When higher costs, slower trading conditions and creditor pressure arrive together, even an otherwise viable business can find itself short of cash at the wrong time.
Is it a cash-flow gap or a solvency problem?
A business can have valuable assets, profitable work and money due to arrive, but still face a temporary mismatch between when bills fall due and when cash becomes available. You might, for example, have a large invoice due in six weeks but need to meet a tax payment or supplier bill today. A developer may be waiting for an asset settlement while still needing funds to keep another project moving.
Those can be timing and funding problems rather than signs that the underlying business is unviable.
More serious financial distress is different. If your business is consistently unable to pay debts as they fall due, taking on another loan may simply add to the problem. Directors also have legal duties when a company may be insolvent. If you are unsure whether you are dealing with a temporary liquidity problem or something more serious, speak to an appropriately qualified accountant, lawyer or registered insolvency practitioner before taking on further debt.
In other words, the first question is not: “How much can I borrow?” It is: “Will more debt actually solve the problem?”
When can short-term business finance make sense?
Short-term business finance may be useful when you have a clearly defined funding gap and, just as importantly, a credible way to repay the debt. For example, business bridging finance may help cover a temporary shortfall while you wait for incoming funds. If a known payment, property settlement or other liquidity event is expected within a defined period, the finance can give you time to meet an immediate obligation without disrupting the rest of the business.
Working capital may also be appropriate if you need funds to complete a project, purchase stock or meet another commercial obligation and there is a clear path to generating or accessing the money needed for repayment.
The common factor is the exit. Before taking on additional finance, you should understand where the repayment funds will come from, when they are expected to arrive and what happens if that timing changes.
When more debt is not the answer
Finance can solve a liquidity problem. It cannot make an unviable business viable. If you are borrowing simply to meet recurring expenses without a realistic improvement in business cash flow, refinancing one overdue debt with another may only delay the underlying problem.
The same applies if your proposed exit depends on assumptions that may not eventuate. That is why the distinction matters. A temporary funding gap may be financeable. An ongoing inability to meet debts requires a different response.
How property-backed finance can help
If your business has a temporary funding requirement and suitable property security, property-backed finance may provide another option. A facility can be structured around a specific commercial need and a defined exit. The property provides the security, while the proposed exit explains how the facility is expected to be repaid.
Depending on the transaction, that exit might involve the sale or settlement of an asset, refinancing into longer-term finance or another clearly identifiable source of funds. For businesses that need a more flexible or time-sensitive funding solution, a private business lender may be able to structure the loan around the property security, the purpose of the transaction and the proposed exit.
The key is that the debt has a job to do and a way out. Used appropriately, short-term business finance or business bridging finance can provide breathing room when timing is the issue. But the finance should address a temporary funding need rather than postpone a deeper financial problem.
Archer Wealth provides property-backed finance for eligible business and commercial borrowers. As a private business lender, we can provide short-term funding for businesses with suitable property security and a viable exit strategy. If you have a short-term business funding requirement, contact us to discuss your scenario, or speak to your broker about Archer Wealth.