Credit crunch hits high street
Business insolvencies are set to climb, experts have indicated, after a long plateau in company failures
Business insolvencies are set to climb, experts have indicated, after a long plateau in company failures
Retailers are set to suffer in particular as the credit crunch reaches the
high street. The next six months will see a spate of leisure and retail
insolvencies as tighter credit facilities hit the sector, experts suggest.
More automotive and construction businesses were also expected to enter
insolvency. ‘Inter-bank interest rates are up and if that continues we are
likely to see an upturn in insolvencies,’ said Nicholas Pike, partner in
corporate recovery and restructuring at LG, ‘but I’m not expecting a full-blown
recession’.
‘Banks will look at businesses by sector,’ said Nick Hood, senior partner at
Begbies Traynor. ‘The turmoil from inter-bank lending will reach commercial
enterprises. If you couple that with consumer indebtedness, then you have to
look at the consumer-related sectors.’
Hood added that construction firms could be in trouble as they were ‘horribly
cash-consumptive’ with low profit margins and were already suffering due to a
slowing commercial property market.
‘As it gets more difficult to refinance, there will be restructuring which in
turn could include more insolvencies,’ said Carolyn Swain, partner in corporate
recovery at Halliwells.
In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...
View resourceIn 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 resourceIn 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 resourceThe 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 resourceInsolvency statistics in the UK for the second quarter of 2023 were the highest since 2009 with 83% of them relating to small businesses Read More...
View articleThere were 6,342 recorded company insolvencies in Q2, reflecting a 9% increase compared to the number of insolvencies in Q1, and a 13% increase compar...
View articleThe survey paints a “brightening” picture of the global economy, according to the ACCA Read More...
View articleThe pandemic may have “distorted” some economic data Read More...
View articleAdvisory firms must offer a “more supportive” and holistic approach to clients amid the economic downturn Read More...
View articleHaving a clear plan and clean data to help optimise the use of scarce resources will be key for businesses Read More...
View articleThe Coronavirus Job Retention Scheme has supported millions of jobs amid the pandemic, but with the support measure set to end in September, how can a...
View articleShift from BBL debt to equity could pose wider business implications Read More...
View article