The most recent Red Flag Alert report, produced by insolvency firm, Begbies Traynor, recorded a jump of 93,000 firms in the first quarter of 2021, which suffered significant financial distress.
This figure is the highest quarterly leap since 2014. It comes not so much a surprise with a year (or more) of coronavirus disruptions including enforced lockdowns.
The number of businesses suffering was therefore a 42% increase over the past year, totalling 723,000.
Within the report it is noted that logistics and real estate sectors saw sharp increases in hardship in the first quarter of 2021.
With restrictions easing, will this be enough to prevent distressed companies from becoming insolvent? Are zombie companies too close to breaking? It is worth noting though that although companies are distressed they are being supported by loans and grants and consequently the actual level of insolvencies are at a record low.
It is more important than ever for those in trouble to seek help immediately. Guidance and support is needed, before it is too late.
If you are a worried director reading this, then please do not hesitate to get in touch with us today. We can offer expertise and advice to help you through this distressing time.