Australian businesses are teetering towards an insolvency cliff, as rocketing interest rates cause companies to miss payments at a record rate.
Business to business trade payment defaults jumped to a high of 1586 in June – a 52 per cent increase on the previous year – according to the latest CreditorWatch business risk index.
The data shows businesses are increasingly coming under financial stress as the Reserve Bank’s 12 consecutive interest rate hikes put the squeeze on companies and consumers alike.
With the RBA’s latest pause likely to only be temporary, the coming months are set to result in growing rates of insolvencies, says CreditorWatch chief executive Patrick Coghlan.
“The impact of the rate rises, as well as high inflation,…
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