Quick answer
To recover from a bad trading year, work in three 30-day phases. Days 1–30: get a clear picture of cash, debts and lodgements, and stop the bleeding. Days 31–60: fix the cause — pricing, costs, customers or payment terms — and talk early with the ATO and key creditors. Days 61–90: rebuild steady statements and a forecast. Funding can help once the cause is addressed, and bruised credit is considered case by case.
Key points
- Get the full picture first — cash, debts, lodgements — before making big decisions.
- Lodge on time even if you can't pay; talk to the ATO early.
- Fix the cause of the dip before borrowing, or the funding just delays the problem.
- Three to six months of steady statements is your strongest comeback evidence.
A bad year in business rarely has a single cause. It’s usually a combination: a key customer leaves, costs rise faster than prices, a flood or fire shuts the doors for a few weeks, a staff member departs at the worst time, or life outside the business takes more of your energy than usual. By the time the numbers show it, you’re already tired.
This plan is designed for exactly that moment. It breaks recovery into three 30-day phases, so you can focus on one thing at a time. You don’t need to do everything at once — you just need to start.
Before you start: look after yourself
Running a business through a hard year is draining, and tired people make rushed decisions. The Australian Small Business and Family Enterprise Ombudsman has a financial wellbeing hub with links to free support, and business.gov.au has a section on managing stress in your business. Talking to someone early — your accountant, a mentor, a counsellor — isn’t a luxury. It’s part of the plan.
If the bad year came from a natural disaster, check Disaster Assist for recovery support available in declared areas.
Days 1–30: get the full picture and stop the bleeding
The first month is about clarity. You can’t fix what you can’t see.
1. Work out your cash position. Today’s balance, what’s owed to the ATO at your next BAS, and your runway in weeks. Our cash runway guide shows how.
2. Map every debt. Every loan, card, advance, supplier account and ATO balance — with repayments, frequency and due dates. Include anything overdue.
3. Check your lodgements. Log in to ATO online services and check which BAS and returns are outstanding. Lodge anything overdue, even if you can’t pay. Lodging and paying are separate obligations, and staying on top of lodgements keeps options open.
4. Check the warning signs honestly. business.gov.au lists signs of financial trouble, including not knowing what’s coming in or going out, customers paying late, struggling to pay suppliers or tax, low margins, not paying yourself and relying on borrowed money to keep going. How many apply?
5. Stop the bleeding. Pause spending that isn’t essential. Cancel subscriptions nobody uses. Hold off on new commitments until you have the full picture.
6. Don’t stack more short-term debt. Taking one advance to repay another is how a temporary dip becomes a long-term problem.
Days 31–60: fix the cause and have the conversations
With the picture clear, month two is about the why — and about talking to the people you owe.
1. Name the cause. Be honest. Common culprits:
| Cause | What fixing it might look like |
|---|---|
| Prices haven’t kept up with costs | A price review, even a modest one |
| A key customer left | A deliberate plan to replace the revenue, not just hope |
| Customers pay slowly | Shorter terms, deposits, faster invoicing, firmer follow-up |
| Costs crept up | Line-by-line review of every regular outgoing |
| One-off event (flood, illness, roadworks) | Recovery is mostly about time and bridging the gap |
| The market has shifted | A harder rethink of what you sell and to whom |
2. Talk to the ATO early. The ATO offers payment plans, and if you owe $200,000 or less you may be able to set one up online. Early contact generally leads to better outcomes than silence.
3. Talk to key suppliers and lenders. Explain what’s happened and what you’re doing about it. Many will agree to adjusted terms for a period if you ask before you default.
4. Get your accountant involved. A second set of eyes on your numbers and structure is worth the fee now more than ever.
If you’re weighing up whether funding could help — such as clearing ATO debt or consolidating expensive advances — you can talk it through with a real person. There’s no credit check when you first enquire.
Days 61–90: rebuild and look forward
Month three is about building evidence that things have turned.
1. Build a 13-week forecast. Map money in and out for the next quarter. It shows where the remaining low points are and gives you something concrete to manage against.
2. Keep every lodgement on time. From here on, no exceptions.
3. Separate tax money. Open a dedicated account and move GST and PAYG withheld into it each week.
4. Let clean statements accumulate. Every month of steady deposits and on-time payments is part of your comeback story.
5. Check your credit report. You can get free copies from the credit reporting bodies. Fix any errors and know what a lender will see.
6. Write your five sentences. Our guide on explaining your business to a lender gives you a script for describing what happened and what’s changed — useful for suppliers, landlords and lenders alike.
When does funding help a recovering business — and when doesn’t it?
| Funding can help when… | Be cautious when… |
|---|---|
| It clears ATO debt that’s creating pressure | It would only cover ongoing losses |
| It replaces several expensive short-term debts with one planned repayment | The cause of the dip hasn’t changed |
| It bridges a known gap until a specific payment arrives | There’s no clear way it will be repaid |
| It funds a specific step that restores income | It’s the third or fourth facility in a year |
Bad credit and ATO debt are considered case by case. Property-secured loans from $20,000 to $5,000,000 are often the most accessible route during a recovery, because the security carries much of the weight. Unsecured options generally come back as your statements recover. Our recovering stage guide and bruised credit page explain both in more detail.
An illustrative example
Illustrative only. A small events hire business lost most of a peak season when a major client cancelled a run of events and a storm damaged stock. By autumn, it had overdue BAS, two short-term advances and supplier accounts on stop.
- Days 1–30: the owner lodged the overdue BAS, mapped every debt and found five weeks of runway.
- Days 31–60: she named two causes — dependence on one client and an underinsured storage shed — set up an ATO payment plan online and agreed extended terms with two suppliers.
- Days 61–90: she won three smaller corporate clients, increased her insurance and built a 13-week forecast.
With the causes addressed and four months of steadier statements, her funding plan showed a property-secured loan to consolidate the advances as a strong match — one repayment her recovered trading could carry.
How do you talk to your team about a tough patch?
If you have staff, they’ve probably noticed things are tight. Silence breeds rumours, and good people start looking elsewhere when they’re unsure. You don’t need to share every number, but a short, honest update — what’s happened, what you’re doing and what you need from them — usually builds loyalty rather than panic. Ask for ideas too: the people closest to customers and costs often spot savings or opportunities you haven’t.
Be careful not to make promises you can’t keep, and keep paying wages and super on time — under Payday Super, super now goes out with each pay run. Protecting that trust is one of the most valuable things you can do during a recovery.
Coming back from a hard year? Let’s talk about what’s next
Getting through a bad year takes resilience, and planning your way out of it takes courage. We talk with owners in recovery all the time, and we don’t shy away from bruised credit or ATO debt — we look at where your business is heading, not just where it’s been.
It takes about a minute to enquire, with no credit check at that point. We don’t hand your details around to a throng of lenders; a real person reads your situation and calls you. Please be open on the form about any ATO debt or credit issues — it’s the quickest way to an option that genuinely fits.
Frequently asked questions
How do I know if my business is in financial trouble?
business.gov.au lists warning signs such as not knowing how much money is coming in or going out, customers paying late, difficulty paying suppliers or tax, low margins, being unable to pay yourself and relying on borrowed money to keep going.
Should I borrow to get through a bad year?
It can help when the cause has been dealt with and the funding clears pressure — for example, consolidating expensive short-term debt or clearing ATO debt. It's riskier when it only covers ongoing losses without changes to the business.
Can I set up a payment plan with the ATO myself?
The ATO says businesses that owe $200,000 or less may be able to set up a payment plan through its online services. Larger debts usually need a conversation with the ATO.
Where can I get free support?
business.gov.au has a financial trouble section, and the Australian Small Business and Family Enterprise Ombudsman has a financial wellbeing hub with links to free support. Your accountant is also a key first call.
How long before I can get finance again after a bad year?
It depends on the option. Property-secured loans can be possible sooner, because the security carries weight. Unsecured options usually return once several months of steady statements show the recovery.