In August 2026, Bathla Group, one of Sydney’s largest residential developers, collapsed into voluntary administration owing an estimated $3 billion. Thousands of homes and apartments across New South Wales, Victoria and South Australia are now in limbo, and the subcontractors and suppliers who built them are left waiting to be paid.

Whilst the scale of the numbers is unusual, the pattern is not. A business that looked solid a year ago can still enter External Administration, and when it does, everyone who extended it credit feels the impact. Prior to entering External Administration, NCI released 25 alerts to clients regarding Bathla Group’s performance. Many of these businesses have Trade Credit Insurance and already lodged claims to ensure their cashflow is protected.

It is a timely reminder of something we say often. You are never too big to experience a cash flow crisis, and you are never too big to cause one for somebody else.

Our own NCI Trade Credit Risk Index has shown insolvencies remaining elevated through 2026, with building and construction consistently one of the more exposed sectors. Bathla Group is the largest name in that trend so far this year. It will not be the last.

This is exactly the risk trade credit insurance is built for. In a nutshell, it is an insurance product that protects your business against the risk of a bad debt, typically covering up to 90 per cent of an insured debt when a customer cannot pay. It does not stop a developer of Bathla’s size from failing. It makes sure that when a customer does fail, the loss does not fall entirely on your business.

Hypothetically, let’s say Bob’s Electrical is owed $250,000 for work completed across three Bathla Group developments. Without cover, that loss lands straight on Bob’s bottom line, and at a typical trade margin, he may need to find hundreds of thousands of dollars in new work just to recover it. With trade credit insurance in place, the bulk of that $250,000 is protected, and Bob’s business keeps trading whilst the administrators do their job.

A collapse of this size is also a good prompt to check the basics. A few things worth doing now:

Review your exposure: know exactly how much you are owed by every customer, not just the ones you are already worried about.

Watch the adverse information: monitor your debtors so a deteriorating customer does not catch you by surprise.

Do not assume size equals safety: some of the largest insolvencies in Australia have involved ‘blue chip’ names nobody expected to fail.

Protect the ledger: your debtors ledger is often the largest asset on your balance sheet, and it deserves the same protection as your buildings and equipment.

For more information, or if your business has been impacted by the Bathla Group collapse, please contact NCI.

Kind regards,
Prudence Chang
Group Managing Director