Bank losses on firms at lowest level in four years

Bank losses on firms at lowest level in four years

Professional service firms producing lowest bank write-offs since 2009 according to finance provider Syscap

BANK WRITE-OFFS to professional service firms have now fallen to their lowest level last year, since just after the recession began, according to an independent finance provider.

Write-offs were £264m in 2013 compared to £259 in 2009 for all law, accountancy and other unincorporated firms for the year ending 30 September 2013, according to Syscap.

Write-offs to firms hit a high of £315m in 2010 declining to £292m in 2011 and £278m in 2012.

Despite high profile collapses such as RSM Tenon and law firm Manches, the professional service sector is now a better credit risk for lenders.

Philip White (pictured), CEO Syscap, said: “Legal and accountancy firms performed relatively well during the recession compared to other sectors, there has been a perception more recently that lending to the sector is becoming high risk, and this has impacted heavily on bank lending.”

“For accountancy firms the drop off in consulting and transactional work that is normally associated with recession has been somewhat offset by more insolvency work and the very militant approach that HMRC has been taking on suspected tax evasion, which has created more work for parts of their tax teams.”

The professional services sector saw a decline in critically distressed businesses in the fourth quarter of 2014 compared to the previous quarter, according to a Begbies Traynor Red Flag report on financially distressed companies.

There was a 21% decline of professional service firms that were in critical distress for the fourth quarter of 2013, compared to the previous quarter. There were 68 critically distressed firms in Q4 2013 from 77 in Q4 2012.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource