The most recent insolvency statistics released last week highlighted how the insolvency rate for companies had fallen 12% compared to the previous quarter – looking hopeful for businesses.
However, the insolvency and restructuring trade body, R3, have warned that business owners should not be drawn in by false hope, as the fall may only be a slight blip, in what is actually an underlying upward trend.
It cannot be ignored that despite the fall in the last quarter comparisons, compared to the same time last year, the figures are actually 12% higher, as a result, company directors should stay vigilant to enable the safety of their businesses.
A partner of the Nottingham Office of Gately Law Firm, Mr. Radford, states that a domino effect is still yet to be felt. When businesses struggle, they have a knock-on effect on their suppliers and customers. With the recent loss of large firms such as Toys R Us and Carillion, the effects are still up and coming. R3 members are saying how they’re receiving enquiries regarding the need for advice and support in companies linked to retailing, such as recruitment agencies.
All businesses are being faced with multiple pressures, be it the slow economic growth, increasing staff costs and high business rates.
Therefore, it is vital for businesses with any problems to get advice early.
The recent statistics may not indicate a massive improvement in the economy so companies need to be vigilant.