The latest statistics from the Insolvency Service have been released for the period between 1 January and 31 March 2022. It’s no surprise really to see that the number of registered company insolvencies has increased slightly on the previous quarter, and significantly on comparison to the same period last year. Let’s take a look at the numbers in a bit more detail.
Of course, part of the reason why we are seeing this gradual increase in company insolvencies is the result of government financial support for companies ending. Temporary restrictions on the use of statutory demands have also been lifted. This support has helped viable businesses to survive the last two years, but it’s also prolonged the life of businesses which were probably already insolvent.
Looking at the statistics, the headlines could easily suggest that UK companies are closing down because the government support has now been pulled. But what we’re personally observing should be giving company directors more credit.
Rather than continuing to let debt and arrears build up, company directors are taking positive action. The financial support from the government was needed at the time, and for the right type of company (the ones that weren’t already in debt and had a viable business model) it was a valuable lifeline.
But for the ones that were perhaps already struggling, the government support allowed them to legitimately take on more debt in the form of the CBILS and Bounce Back Loans.
Now that such support has come to an end (and the loans have been spent) directors have had to make those tough decisions, because there are no more ‘lifelines’ on the horizon. The positive here is that they are addressing the problems AND talking to the right professionals to look at their options.
For some, the answer is closing the company either via liquidation or administration. But there may be other options that could help to restructure the company – IF the business is viable.
Will next quarter see the number of company insolvencies rise again? Yes. But only as a result of company directors taking action against the increasing debt they have in their company.
Whether you’re a company director looking for confidential advice from a licensed insolvency practitioner, or you’re a professional advisor who’d like advice and support for a client who is financially struggling, the team at TruSolv are here and ready to help.
It costs nothing to pick up the phone to us, and there’s no obligation to continue working with us. It gives us the opportunity to provide you with free advice, and more concrete answers upon which you can make decisions in the future.
Contact us today on 0808 196 8676.
Through the years our team of experts have helped hundreds of UK companies buckling under financial pressure find their way back to sustainable growth. Whether you need advice on dealing with creditors, repaying business debt, setting up a payment schedule with HMRC or any other pressing issue, we’re the company to call. We’ll guide you every step of the way through the process of restructuring, refocusing and recovering.
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