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Challenging times as corporate insolvency numbers rise

CORPORATE insolvencies are on the rise as the country emerges from the Covid-19 pandemic.

The latest official figures show that corporate insolvencies increased by 8.8 per cent to 1,011 in May, a rise of 6.9 per cent as compared to the same period last year.

And Sheffield expert Deborah Lockwood, of business turnaround and insolvency practice Graywoods, warns that the numbers could continue to grow as companies struggle to find their feet again without government pandemic support.

“A rise of just about two per cent over the past year might not seem so bad but the reality is most certainly that these remain very challenging times for many businesses,” Deborah said.

“The government’s package of support has almost certainly damped the numbers down but as we emerge from the pandemic and that support is withdrawn, business owners are now having to think about how they will go it alone.

“It should be pointed out that the increase in corporate insolvencies has been driven by a rise in Creditors’ Voluntary Liquidations, while administrations are actually at their lowest number since the start of the pandemic.”

The virus, she added, had made a major impact on every sector of the business community and that impact would continue to reverberate for some time to come.

“It is at a time like this that I emphasise once again the importance of seeking the right advice at the right time - and that is always sooner rather than later,” Deborah said.

“There is no doubt that there are going to be more tough decisions to be made as we enter the second half of this difficult year but by seeking advice before a problem becomes a crisis, many business owners could steer their way to a brighter future.”

This was posted in Bdaily's Members' News section by John Highfield .