Date posted: 3/07/2020 5 min read

Aussie businesses struggling with COVID-19 should seek help right now

Leniency for insolvent trading ends in September, so distressed businesses must act fast. Brought to you by Olvera Advisors.

The economic upheaval caused by COVID-19 is having a profound impact on thousands of businesses across Australia, with many facing increasingly uncertain futures.

As the economic fallout from the pandemic continues with no end in sight, it’s critical that firms find effective ways to navigate this new and rapidly changing business environment.

Adapting to today’s ‘new normal’

For Olvera Advisors partner Kate Barnet, that involves struggling firms acting fast in order to adapt, as quickly as possible, to what she describes as today’s “new normal”.

Sydney-based Barnet points to the federal government granting, until September, greater leniency to financially distressed businesses in Australia around insolvent trading.

“There’s a lot of motivation to act early when there is no personal liability for directors and take the first step, as you’re most likely not going to get that opportunity again,” she says.

“So, there’s a massive opportunity for businesses to act quickly to take advantage of the empathy and sympathy that exists currently, and come up with solutions that may see some survival plan developed rather than waiting until it’s too late.

“There’s a lot of motivation to act early when there is no personal liability for directors… as you’re most likely not going to get that opportunity again.”
Kate Barnet, Olvera Advisors

“This next six months is going to be critical and I would be looking to swiftly resolve issues, restructure, or do whatever it takes to get it done now, rather than waiting for legislation to resume as normal.”

Flexible solutions for evolving challenges

In addition to moving fast, Barnet says “flexible and lateral” solutions are also key right now.

That’s why Olvera Advisors, a recently established boutique liquidation and business advisory firm, views liquidation and administration just as “tools and not the end solution”.

With this in mind, Barnet says Olvera Advisors is all about “taking control of the process and making the best of a bad situation”.

“This next cycle is going to be forced upon so many businesses. As a result, Olvera Advisors has developed strategic services that spread across various distressed-style engagements, but not necessarily in a traditional sense,” she explains.

“Our aim is to help businesses identify their real underlying problems, then identify and work with key stakeholders to secure the short-term finance and debt consolidation required to facilitate a restructure.”

Diversity and inclusion ‘a cornerstone’ of success

Charting a course in today’s altered and fiercely competitive landscape also means responding to the needs of a diverse client base, according to Barnet.While the insolvency profession at large still has a long way to go on the issue, Barnet says Olvera Advisors “lives and breathes” such a commitment.

“It’s a cornerstone. You need to be flexible to your client base and you need to be able to adapt to what they’re demanding and I think the insolvency profession needs to move and change on that,” says Barnet, who is chair of the Australian Restructuring Insolvency & Turnaround Association’s Balance Taskforce on diversity and inclusion.

“We want people from different genders and people from different lifestyles to be involved in creating solutions because accountants just don’t have all the answers.”

Whoever the client, Barnet says Olvera Advisors works with them to “reset and grow”.

That’s the approach the firm takes, she says, whether it’s assisting an SME, ASX-listed entity or family group on issues such as business transformation, distress debt and capital, or crisis management.

“The key indicator of a successful business is its ability to maintain a strong balance sheet and forward outlook despite any short-term fluctuations in value,” she says.

“A turnaround that can focus on increasing the underlying value over the long term, enables the true value of the company to be sustained, reinforced and grown.”

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