Company Insolvencies Soar: Owners Fear For The Future

7th February 2018.

It will be a surprise to no-one to hear that company insolvencies have risen. From the collapse of Palmer and Harvey last year, to the collapse of Carillion and Warren Evans this year, it has not been good news for business owners; or suppliers, or anyone who has any connection to businesses in the UK.

According to recent insolvency figures, there was a 4.2 percent rise in company insolvencies in 2017 to 17,243. Inflationary pressure and higher business rates for retailers have led small business owners to run for the nearest exit. Here at the Credit Protection Association, we have rescued business owners from the brink of insolvency and reassured members who have wandered into the red zone. There are preparations and precautionary measures that owners can do to avoid becoming another statistic, whether its preventative or a rescue mission.

Recent insolvency figures are a real concern and large numbers of business owners expect to sell, hand-on or close their business in the first quarter of 2018.

Inflationary pressure, disappointing domestic growth and flagging consumer demand are all weighing on the small business community. The proportion of small firms reporting a rise in operating costs is now at a five-year high.

The impact of the demise of Carillion also cannot be ignored, particularly its impact on supply chains across the UK.

Mike Cherry, National Chairman for the Federation of Small Businesses (FSB) recently demanded that Government do something about the insolvency numbers, suggesting public contracts for small businesses and a reformed Prompt Payment Code are “a good place to start”.

Insolvencies are hitting the economy hard. Whether its personal insolvencies or company insolvencies, something needs to be done to aid the financially vulnerable. The main issue has always been late payment. The government created the voluntary Prompt Payment Code, which not only failed to make an impact, but also had liquidated construction giant, Carillion, as a signatory. Late payers have continued to dominate the lives of businesses across the UK, and have undoubtedly contributed to some of the ensuing insolvencies.

The Credit Protection Association has helped many of our members out of a late payment slump, chased down the invoices and got them back what they are owed. Ultimately it is also the responsibility of the owner as well. At CPA we offer a range of credit management products, from credit reports, credit monitoring and company directories. Along with the initial credit application form, these products are utilised to ensure our members know exactly who they are doing business with. The supply chain is vulnerable so don’t allow one chink in the metal bring your cash flow tumbling down! Come to CPA for cash flow relief and put as much distance as you can between your business and that insolvency brink.