BusinessBusiness Recovery140,000 companies “in severe financial distress”-Begbies Traynor

140,000 companies "in severe financial distress"-Begbies Traynor

Insolvency specialist says Q4 2009 figures come "despite government support measures"

More than 140,000 companies “experienced significant and critical financial
problems” in the fourth quarter of 2009, according to statistics from Begbies
Traynor.

The figure for companies in “high levels of corporate distress” for Q4 2009
is 6 percent higher than the figure for Q3 2009, but 14 percent lower than Q4
2008, according to the firm’s Red Flag report.

These statistics come “despite the positive effects of government fiscal
stimulus” such as the VAT rate reduction, quantitative easing and the Business
Payment Support Service, Begbies said.

Ric Traynor, executive chairman of Begbies Traynor, said: “Government support
measures are providing welcome relief to the UK’s struggling companies in the
short term but they may exacerbate problems for some businesses as the need to
repay debt catches up with them later in the year.

“Experience of the last four recessions tells us that unemployment levels and
corporate and personal insolvencies have lagged behind technical recession by 1
to 2 years. With tax and interest rates certain to rise, as well as increasing
pressure on consumer spending, there is every reason to suggest that the
insolvency peaks of this recession remain some way off.

While business finance is expected to become more readily available during
the first half of 2010, we anticipate a rise in the levels of financial distress
during the second half of 2010, as temporary financial support measures are
unwound.”

Further reading:

The
good, the bad and the future

Related Articles

Professional services sentiment improves as 'Brexit means work'

Accounting Firms Professional services sentiment improves as 'Brexit means work'

1y Stephanie Wix, Writer
Begbies Traynor appointed administrators of William Anelay

Accounting Firms Begbies Traynor appointed administrators of William Anelay

1y Richard Crump, Writer
Begbies Traynor turns profit as insolvency figures slump

Accounting Firms Begbies Traynor turns profit as insolvency figures slump

1y Fraser Simpson, Reporter
Begbies Traynor forms pact with CICM

Business Recovery Begbies Traynor forms pact with CICM

2y Chris Warmoll, Writer
Begbies Traynor to help address NI's huge rise in insolvencies

Business Recovery Begbies Traynor to help address NI's huge rise in insolvencies

2y Chris Warmoll, Writer
Begbies Traynor profits slump amid challenging market conditions

Accounting Firms Begbies Traynor profits slump amid challenging market conditions

2y Richard Crump, Writer
Jobs lost as Begbies Traynor appointed administrator at Liverpool builder

Accounting Firms Jobs lost as Begbies Traynor appointed administrator at Liverpool builder

2y Chris Warmoll, Writer
Begbies snaps up P&A Partnership in pre-pack deal

Accounting Firms Begbies snaps up P&A Partnership in pre-pack deal

2y Richard Crump, Writer