Cashflow problems for many Australian small businesses will “worsen considerably” over the next year, according to National Credit Insurance Brokers. The Adelaide-based trade credit insurance specialist says insolvencies in the manufacturing, construction and trades sectors will rise this year.

“With debt levels at record highs and competitive pressures eroding margins, any increase in interest rates will have serious cashflow implications for manufacturers and sub-contractors, National Credit MD Ian Box said. “The ageing of outstanding debts is growing and we are seeing more businesses having to go to legal recovery.”