Before you call an insolvency firm or liquidator

Type “business debt help” into a search engine and look at who’s answering. A large share of the results come from insolvency firms and advisers whose work starts when a company enters a formal process. That’s not sinister. It’s their business. But it does shape the advice. If the only tool on the table is a formal appointment, it’s easy to believe a formal appointment is the only answer.

Before you make that call, it’s worth ten minutes to check whether your business could be funded out of the pressure instead.

Why does it matter who you call first?

Because the first conversation frames every decision after it. Different advisers see different solutions:

Who you call	What they typically offer	Who controls the company
Registered liquidator or practitioner	Voluntary administration, small business restructuring, liquidation	The practitioner, except in restructuring, where directors keep control
Pre-insolvency or turnaround adviser	Negotiation, restructuring advice, referrals	You, while you pay for advice
Your accountant	Tax, cash flow, referral to other specialists	You
A specialist lending team	Refinancing the pressure with a loan	You

ASIC’s figures show how busy the formal side is. In 2023–24, more than 11,000 companies entered external administration, up 39% on the year before, and small business restructuring appointments made up 12.9% of all external administrations (ASIC annual insolvency data).

What should I know before any meeting?

Walk in with the facts. Before speaking to anyone, gather:

1. What’s owed: ATO, suppliers, lenders, landlord, staff entitlements and super. Amounts and due dates.
2. Formal notices: director penalty notice, garnishee, statutory demand, court claims.
3. Core profitability: take out the one-off hits. Does the business make money on its normal work?
4. Assets: property (yours, the business’s, related entities’), equipment, debtors.
5. Cash flow: the last six to twelve months of bank statements.

With that list, you can have a far better conversation with any adviser, and you’ll know quickly whether funding is realistic.

Which questions should I ask an insolvency adviser?

• If we go ahead, who controls the company, and from when?
• How are you paid, how much, and from what?
• What happens to my personal guarantees and any director penalty exposure?
• What does this process usually lead to for a company our size?
• Have you considered whether the debts could be refinanced instead?

That last question matters. ASIC’s voluntary administration guide explains that an administrator takes full control and the directors’ powers are suspended. That’s a significant handover to make without first checking a refinance.

If you’d like a funding view to put beside theirs, start a 60-second enquiry. There’s no credit check when you first enquire, and it’s confidential.

When is funding worth exploring first?

Funding makes sense to explore when the business is viable and the pressure is a defined debt or timing problem. Warning signs listed in ASIC’s information for directors, such as creditors unpaid outside usual terms, demands and judgments, often turn up in businesses that are still fundamentally sound but short of cash.

Property-secured business loans from $20,000 to $5,000,000 can pay the ATO, suppliers and expensive short-term lenders directly at settlement, leaving you with one lender. Unsecured, cash-flow and line-of-credit options, typically $5,000 to $500,000, help where there’s steady turnover but no property.

The same ASIC page also lists “an expectation that the ‘next’ big job/sale/contract will save the company” as a warning sign. That’s a fair challenge. Funding should be based on the business as it is today, not on hope. Our way-out finder is a quick way to test that honestly.

What if formal help really is needed?

Then get it, and get it early. Directors have real obligations when a company can’t pay its debts, and a registered practitioner is the right person to guide a formal process. Knowing you’ve checked the funding option first means you can make that decision with confidence rather than wondering later. For eligible companies, small business restructuring also lets directors keep control while a plan is put to creditors.

Illustrative example: a second opinion

Illustrative only, not a real client. The owners of a Gold Coast café group receive a statutory demand from a supplier and an ATO letter in the same week. A pre-insolvency adviser suggests a formal process and asks for a fee to begin. The owners, who have equity in their home, ask for a funding view first.

Their two main venues are profitable; a third has been losing money. A specialist lender provides a second mortgage over their home, pays the supplier and the ATO at settlement, and the owners close the loss-making venue. They carry on with two venues and one lender.

How does funding compare with a formal process on cost?

A formal process has its own costs: practitioners’ fees, time away from running the business, and often lost goodwill with customers and suppliers who see the appointment. A loan has a cost too, and specialist lending to a difficult file costs more than bank finance. The comparison that matters is total cost and total outcome. With funding, every creditor is paid, you keep control and your business carries on with one lender. Weigh that against what a formal process would actually return and what it would leave you with. If the pressure comes mainly from suppliers, see funding to settle trade creditors, and for a quick private sense-check, try the way-out finder.

Get the funding view before anyone takes the keys

Your business, your decision; we simply think you should see every option first. A minute on our form, no credit check when you first enquire, and no chance of your phone lighting up with strangers, because we don’t sell or share enquiries. One specialist calls you back, and the conversation is confidential.

Please be accurate about what’s owed and any notices you’ve received. The honest picture gets you an honest answer. See if you qualify →