Serious figures show that the rate of business insolvency in England and Wales is well up on ten years ago. If your business is in financial trouble, now is the time to stop it and get help.
Chris Ferguson, who is both chairman of insolvency and restructuring for trade body R3 in the North East, and head of collections and insolvency at RMT Accountants & Business Advisors, says data from the second quarter of 2022 revealed a 12.7% increase in the number of business insolvencies in the first three months of the year, and the highest levels of business insolvencies since 2012.
Insolvency Service statistics show 5,629 business insolvency cases were filed in England and Wales between April and June (Q2) this year, up from 4,995 in the previous three months (Q1) .
The new second quarter figure also represents a substantial increase of 81.3% year-on-year compared to the same quarter in 2021 (3,105 cases).
The statistics also show that the 4,908 companies put into liquidation through Creditors’ Voluntary Liquidations (CVL), a procedure initiated by insolvent company executives to shut down their businesses, was the highest quarterly figure on record.
Chris Ferguson advises business owners in the North East who think they are facing financial difficulties to take proactive steps to address them as soon as possible.
He says: “Seeing the highest levels of corporate insolvency since 2012 should be a wake-up call for directors of troubled businesses in the North East who should do all they can as soon as possible to take action. reduction measures.
“The record number of voluntary creditor liquidations indicates that many directors are choosing to close their businesses out of a lack of confidence in their future business prospects, while the steady increase we have seen this year in forced liquidations suggests that creditors are taking action. now to try to recover the sums owed to them.
“The current economic headwinds are likely to get worse before they get better, meaning businesses in our region are likely to experience a tough second half, while consumers must prioritize rapidly rising household bills before they get better. to be able to think about spending their money somewhere else.
“This will have a ripple effect on businesses who simply will not see the footfall they are accustomed to, and coupled with a combination of skyrocketing operating costs, supply chain issues and a market tense work, it could spell real trouble for many.
“For business leaders in the North East concerned about their prospects in the months ahead, now is the time to ensure they have a clear plan in place for the future.
“I urge them to make sure they understand how to spot early signs of business distress, such as having trouble paying bills as they come due or not receiving money owed to them on time. customers, and to seek advice from a qualified professional as soon as they are concerned.
“It will give them more time to think about the future of their business and more options to turn around their financial situation.”