UK business insolvencies are on the rise
By Mr Bankruptcy
22nd June 2023
There was a lot of speculation during lockdown that many businesses would struggle to survive once the economy opened up again and that insolvencies would increase. Since the end of lockdown, financial insecurity seems to have got worse and the general feeling is that an even greater number of businesses are no longer able to continue.
But do the statistics back this sentiment up, how is the future looking, and what can you do to help your business to deal with debt and keep operating?
13-year high for insolvencies
According to a report by the Institute of Chartered Accountants in England and Wales (ICAEW), company insolvencies have risen to a 13 year high. This trend started in the fourth quarter of 2022 but it’s feared that the worst is yet to come.
This will make uncomfortable reading for many business owners because the number of insolvencies in the last quarter of 2022 rose by 30%, compared to the same period in the previous year, and March 2023 saw a 16% increase in corporate insolvencies compared to the previous month.
Rising interest rates and the ongoing cost of living crisis will continue to impact consumers and businesses alike and as UK business confidence dropped to a 13 year low, also in the fourth quarter in 2022, there’s obviously much concern for the future.
The high cost of borrowing means many businesses will find it hard to secure loans to pay off existing debts and although energy costs may be coming down, energy bill support for business also ended in March. This is combined with a decrease in consumer spending as people continue to look for ways to ride out the ongoing challenges caused by the cost of living squeeze, adding further financial pressure to already struggling firms.
What can businesses do to deal with unmanageable debt?
Many businesses will already feel that they have cut back as much as they can, and without the income there’s not much more they can do. As they see costs regularly outstripping income, they are making the choice to close before things get even worse.
We’ve talked previously about ways business owners can reduce costs to help prevent debt and the 6 essential reports your business needs to help them make informed financial decisions. Courses of action really involve getting back to basic business practices which readers will be familiar with, such as reviewing budgets, cutting costs and exploring what tax relief schemes may be available to your business. But if you still feel that you are running out of options for managing your financial problems or that your debt is becoming unmanageable, then it becomes vital to seek specialist advice, and to do it quickly.
Even when it seems that there’s no clear way forward, there is support available to help you understand the options available to you and your business, so that your next step will be in a direction you can be confident about.
James Rosa Associates
James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt and are looking for a solution, or anyone who is involved in a civil or commercial dispute. Our range of 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.
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If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, then contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk and find out whether you qualify for our free consultation service.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.