Penny’s hospitality business in a coastal tourist town was hit hard by back-to-back challenges. Years of drought had already slowed cash flow, with reduced spending from local farming families and visitors. Just as the business was finding ways to adapt, a Harmful Algal Bloom struck the region, dramatically reducing tourist numbers and further cutting turnover.
With arrears accumulating to both the ATO and suppliers, Penny was under intense pressure. Suppliers were demanding payment and threatening to refuse further goods, while the ATO was reluctant to agree to reduced terms. These stresses compounded her declining mental health, leaving her feeling isolated and overwhelmed.
The Small Business Financial Counsellor (SBFC) began by working through a holistic business assessment and advocating directly with creditors. Initially it was difficult to gain the confidence of both the ATO and suppliers to accept an affordable repayment plan, as the proposed amount was lower than they expected. Persistence paid off — the SBFC was able to secure agreements that gave Penny options, keeping vital supply lines open.
Alongside financial counselling, the SBFC encouraged the Penny to access Beyond Blue’s small business counselling program, where she related to a counsellor who had firsthand hospitality experience. The combination of structured debt management and regular counselling sparked a turning point. While the SBFC initially led negotiations on Penny’s behalf, over time her confidence grew. Within two months she had shifted from sitting back to actively driving her recovery, with the SBFC stepping into more of a navigator role.
A breakthrough came when a major community event brought record numbers of visitors to town. The venue experienced its most profitable weekend in years, allowing the business to pay down arrears ahead of schedule and restore momentum. This boost, combined with the counselling support, helped Penny feel more optimistic and in control of her next steps.
With cash flow stabilising and her wellbeing improving, she made the considered decision to sell the business on her own terms.
This was not an exit in crisis, but a step towards a new chapter with clarity and confidence.
This case highlights the impact of environmental and economic shocks on small businesses, the importance of addressing both financial and mental health challenges, and the positive outcomes achieved through structured interventions and support. By combining practical advocacy with personal wellbeing support, RBS helped transform a situation of crisis into one of renewed stability and hope.
