As company insolvencies in the UK rise, the Business Rescue Service gives their take on latest developments.
(1888PressRelease) February 05, 2011 - The Business Insolvency Service announced yesterday that staff were braced to help failing businesses during a UK company insolvency peak forecast for the year to come. Their comments followed predictions by R3 (the professional body representing the UK's insolvency professionals) that public sector cuts will be followed by a spike in the number of company insolvencies.
R3 released research demonstrating that as many as 148,000 UK businesses would be vulnerable should they lose business deals with the current government. Just under a third of small businesses taking part in the research were described as very reliant or 'fairly reliant' on public sector contracts. 10% were reported as fearing company insolvency should business with the government decline.
"We know from the Insolvency Service's figures that the first three quarters of 2010 alone saw 12,136 cases of compulsory or creditors voluntary liquidation. The figures for the whole year won't be released until March but the commercial environment remains extremely volatile. Companies whose revenue is more heavily reliant on government funded contracts could be entering a period where re-adjustment is vital to avoid company insolvency. Right now, we are ready to help and our staff are fully briefed on the tougher climate for these businesses. For many companies, it will be the case that there are steps they could take if they act soon enough".
The President of R3 Steven Laws commented that 2010 "may well be the calm before the storm" and that businesses with a more divergent customer base will be better equipped to survive in the year to come. In addition to insolvency work with voluntary liquidation, company voluntary arrangements and administration, the Business Rescue Service also work to help companies plan for future trading in difficult conditions. The team provide a vital 'business health check' to help identify and remedy potential problems at the pre-insolvency stage:
"We work with businesses to look at the financial health of the company, aiming to head problems off before they become more serious. We are often able to negotiate with creditors, perhaps renegotiating contractual agreements if necessary. This can help companies to gain the time to stabilise and readjust. This year might mean broadening the scope of their trading activities away from government funded work. We always stress to our clients, try to act sooner rather than later - you may find some of your options become closed off after time".
With predictions of the impact of austerity cuts ranging from mild to catastrophic in differing sectors, businesses can contact the team before, during or after company insolvency for immediate support. To speak to one of their experienced business rescue advisers, call today on 0845 468 2395 or send an email to: