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ISCOVER
Large construction groups have collapsed with more to come thanks to ever increasing construction costs, inflationary pressures are hitting the market with the RBA being forced to increase the cash rate, government debt at record levels, outstanding ATO debts have grown by 77.6% is 4 years to a national debt level of $34.1Billion* – are we heading into dangerous waters?
Back when COVID first hit many of us predicted major problems to come, however hardly any of them have come to fruition, but now the data does strongly point to some correction being imminent. What to do? Be prepared, be wary but continue to do business albeit with a new sense of caution and consideration.
At Oak, we are eternal optimists, well we try to be, and our view is to do exactly the above. We are seeing more loan applications for small time builders who want to cash out to either take advantage of the market moving forward or to fill their coffers so they are ready for an impending hit they may have to take. The fallout from some of the large building group collapses has left many sub-contractors exposed and we stand ready to assist them should they have equity, allow them to reset and continue again.
Oak has a wide range of products and will be able to assist many SME clients moving into the next few years no matter how rough the waters get, our ability to finish an incomplete project will come in handy for many clients, our ability to bridge debt to allow a borrower to sell down other assets and hold a creditor at bay will also be important as interest rates rise. The ATO is expected to ramp up its collection activities post the upcoming Federal election, and with outstanding ATO debts at record highs there will be substantial pressure on debtors to repay their outstanding debt. Luckily, if such business owners have equity in their properties Oak may be able to fund out their tax problem at what ever stage that the recovery is at and relieve their stress so they can get back to business.
In tough times it is never one size fits all, which is exactly why our bespoke credit parameters are designed so we can accommodate a wider range of SME clients in need of a unique credit solution. Mortgage Brokers will require a depth of lenders to assist in an ever increasing distressed client market and Oak Capital will be first on the speed dial for many.
* Reference - ATO’s $34bn debt book outpaces economic growth: Inspector-General of Taxation | Accountants Daily
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