22
June
2020
|
11:00
Australia/Sydney

COVID-19: steps to protect your small business

Summary
  • Take steps to minimise the adverse impacts of the collapse or closure of other small and medium enterprises (SMEs) you deal with.
  • What to do if you are owed money – steps to debt recovery as a creditor.
  • It is important to seek advice from a trusted business adviser (such as a financial adviser, accountant, registered liquidator or lawyer) sooner rather than later.

As many Australian businesses begin to reopen and return to ‘business-as-usual’, some businesses continue to deal with and respond to the financial impact of COVID-19.

Some small businesses may be adversely affected and owed money by other businesses, particularly in industries impacted by the COVID-19 shutdown period.

Protect your small business during COVID-19

The instability created by COVID-19 means it’s more vital than ever to protect your interests when dealing with other businesses.

To minimise the risk of your small business being adversely affected by the closure of other SMEs, ASIC recommends taking steps before you engage with another business:

  1. Ask the right questions that will help you to obtain further information. 
  2. Verify the information they provide (including any licence or authority they hold to operate in certain industries) by checking ASIC’s registers and those of other government agencies. 
  3. If you are dealing with a business that is a company, you can monitor it using ASIC’s Company Alert service.
  4. Review terms of trade you are prepared to offer and your loan and credit contracts.
  5. Be aware of the common scams targeting small businesses with ACCC Scamwatch. 

If you already engage with another business and require assistance because you are owed money, we recommend: 

  1. Seeking business advice from advisers you trust. Information about how to find a suitable adviser is available from business.gov.au and ASIC’s Moneysmart or a registered liquidator.
  2. ASIC’s insolvency information sheet for creditors if you’re affected by another business’ insolvency.
  3. Understanding your rights when engaging in debt recovery. See ASIC’s advice on debt recovery for small business and information about illegal phoenix activity.
  4. If necessary, managing and resolving business disputes with help from the Australian Small Business and Family Enterprise Ombudsman.

Additional information

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ASIC is Australia’s corporate, markets and financial services regulator.