Risk Solutions

The COVID-19 outbreak is a stark reminder of how important it is to insulate against risk. If you’re a trade creditor, a financial institution or you hire equipment, registering on the Personal Property Securities Register (PPSR) is an effective way to boost your rights when faced with customer insolvency. That includes any business that supplies goods and services on credit terms, leases or hires goods, consigns goods to others or lends money.

As lenders attempt to navigate through this period of enormous market uncertainty, Equifax will provide a series of regular analysis. While a clear picture of the future for credit markets is challenging in the short term, we hope to provide some clarity on what trends are developing, what challenges are foreseeable, how you can assess the risks to your portfolios and make prudent changes to your risk management controls.

Opinion piece by Moses Samaha, Executive General Manager, 3 April 2020

The new vernacular of flattening the curve is not a term that anyone could have anticipated as being the most used phrase of 2020, but it is, so what does that mean for lending decisions and how is it impacting the Australian economy?

You want background credit information on a business prospect, so you turn to a commercial credit report. When the report doesn’t raise any red flags about the company, you decide to go ahead and start doing business with them. 

The risk of loss is significant if your new customer doesn’t pay their bills, but at the end of the day, you figure the report would have warned you of anything untoward. But would it?

A clear picture of the future for credit markets is challenging in the short term. However, as lenders attempt to navigate through this period of enormous market uncertainty, Equifax aims to help provide some clarity on what trends are developing, what challenges are foreseeable, how lenders can assess the risks to portfolios and make changes to risk management controls.

There are steps organisations can take to help mitigate the damage and strengthen their response to this pandemic. 

Here are six things to consider in managing this rapidly changing risk landscape.

The end of March is the time of year when AUSTRAC annual compliance reports are due in from reporting entities. Getting your report ready is not always a straightforward task, especially if your Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) program needs work.

Hiring new staff or purchasing inventory. Expanding your product line or ramping up your marketing. There are many different paths to small business growth. Figuring out which direction to take comes down to how well you plan. Building a vision of what you want to achieve and what success means to you will make it easier to get started. Here are six planning strategies that will help take your business to the next level.

Some of your customers might understand the importance of the PPSR, but others may be confused by it, or unaware of its existence. Where your customer sits on this sliding scale is more important to your business than you might think. We spoke to Cheryl O’Brien from Fletcher Building Limited to find out the benefits of educating customers about the PPSR and how to go about doing it.

Statistics released by the Australian Securities and Investment Commission (ASIC)1  shows that despite a drop in company insolvencies in December 2019, there were still 5% more insolvency appointments in Australia for the year ended December 2019.

In NSW, insolvency appointments were up 16% annually, and Victoria observed an annual increase of 12%1 . These increases were primarily driven from the construction sector, which experienced an annual increase of 18%2 of companies closing down (EXADs3).