By Mr Bankruptcy
29th October 2020
Lockdown has seen the rise of a hoard of zombie companies across the country. The Guardian newspaper reported that 20% of businesses in Britain are zombie companies; could yours be one of them?
What is a zombie company?
A zombie company is the name given to businesses that can’t pay off their debts in full and don’t have the cash to invest and grow but are still able, just, to survive and operate day to day.
These businesses cling to their workforce and resources so that they can’t be reinvested in the economy and put to better use by firms with stronger long-term prospects. These companies, in turn, suffer from slower productivity, which depresses the wider economy.
What sustains zombie companies?
A combination of factors are helping zombie businesses to sustain themselves during lockdown:
Could your company be a zombie company?
As the government pushes to reopen the economy, we will see many of the initiatives it introduced to support businesses over lockdown come to an end and we will begin to see just how many businesses are viable and how many have been just delaying the inevitable through Government financial support.
In our post why do businesses become insolvent we discussed the signs of a business in trouble, including:
If your business is experiencing any of these issues and you can’t see an opportunity to turn around the financial situation and address your debts, it may be time to seek advice in order to address your debt rather than allow it to risk your long-term future.
James Rosa Associates
James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors facing unmanageable debt or involved in civil or commercial disputes.
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If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email email@example.com to find out whether you qualify for a free consultation.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.