4th May 2022
Many commentators have been predicting that business insolvencies would be rising in 2022 but those of us working in debt support are beginning to see a clearer picture of the impact all the financial uncertainty of the past two years is having on businesses.
Insolvencies are increasing
The number of company insolvencies in February 2022 was 1,515. Although this was a decrease of 3.2% compared to the January figure of 1,565 it’s still more than double the number of registered insolvencies in the same month last year, and 13% higher than the number of insolvencies in pre-pandemic February 2020.
An increase of Creditors’ Voluntary Liquidations, which were 40% higher that pre-pandemic levels, was a big driver in the number of company insolvencies, illustrating the struggles that many businesses face as owners take the difficult decision to wind up their business.
Why are insolvencies on the increase again?
Government interventions to support businesses during the most challenging times of the pandemic were welcomed in supporting many viable businesses. However, observers were concerned that for other businesses, they just masked ongoing, underlying troubles and delayed the inevitable. Without the financial support they received through the various lockdowns, some businesses were always going to struggle or fail.
These concerns are coming to fruition as the rise in insolvencies coincides with the withdrawal of the financial measures put in place to support businesses: the end of the furlough scheme, loans made by banks now needing to be repaid and restrictions on winding-up petitions ending.
This is in conjunction with ongoing economic uncertainty over supply chain issues, the rising cost of goods, increasing taxes and inflation at its highest levels for 30 years.
As 2022 progresses, these financial challenges, and new ones caused by the international situation, are likely to continue. Businesses will feel as though the financial rug has been pulled from under their feet, just at a time when they were hoping that they were out of the woods.
Be in control of your finances
With financial pressures set to continue, now is a good time for businesses to take a close look at their financial situation, be aware of signs of financial distress and be honest with themselves about their situation.
It is difficult to feel in control during difficult times but taking action quickly will give you more options and possibly lead to a better outcome than you initially envisaged.
Starting a conversation about financial difficulties can be difficult, but being able to seek supportive, expert advice is the first step to taking back control in difficult times.
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 who face unmanageable debt or who are involved in civil or commercial disputes. Our services include:
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
Find out if you qualify for a free consultation
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.