Rising unemployment and tighter credit and government spending will cause more bankruptcies in Canberra before conditions improve, business leaders say.
Independent retailers, coffee shops, restaurants and information technology are the most vulnerable.
Insolvencies in the ACT rose 16 per cent last financial year and businesses are becoming quicker to take court action to recover debts.
But the Canberra Business Council, which expects insolvencies to rise even higher next year when the ACT and Commonwealth Governments tighten their budgets, cautioned against reading too much into the numbers, because they were off such a low base.
The ACT's biggest debt collector, Capital Collection Agency, which retrieved $110,000 in hard-core debt in July, says businesses are running out of patience for slow-paying customers.
Agency principal Peter Collins said, ''People are getting sick of excuses. The level of frustration is increasing. A lot of people won't pay unless there is pressure. All our clients are nice people and nice people rarely get paid.''
Insolvency partner Henry Kazar said business failures would rise due to higher unemployment from a prolonged period of lower consumption. People had lost money in superannuation schemes and would be trying to rebuild wealth.
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