Brexit Business credit management Finance and Legal Government Insolvencies

More UK Restaurants Are Going Bust Up: Can Credit Monitoring Help?

The once booming restaurant industry in the UK has seen a 20% rise in insolvencies with some of the UK’s most well-known chains coming to a closure in the last year.

UK restaurants have unfortunately joined the long list of faltering industries as it battles low demand and Brexit uncertainty.

Following the retail sector’s string of fatalities, restaurants such as Jamie Italian’s and Prezzo have been forced to close branches across the country. The issue remains demand, or more specifically; the lack of it. As consumers continue to tighten their purse strings, consumer industries are seeing their profits shrink and their business confidence plummet. Other factors include the age-old difficulty with Brexit and the consequent rise in property rents, along with consistently high business rates.

Brexit remains the thorn in the side of British business. The restaurant sector remains concerned for how a post-Brexit landscape will take shape, with business owners fearing the increasing business costs. Food costs will certainly rise, along with rent and other operational fees. There will be a shorter supply of staff, with many EU workers already returned to their country of origin.

Online competition and stunted consumer spending have only added to this rather unstable professional environment. Company Voluntary Arrangements have become popular in the last year, providing business owners with a happy alternative to shutting shop completely. While the CVA offers a lifeline, branches and jobs are lost in the process and can merely delay the inevitable.

 

Declining restaurants have a choice to shut down shop completely or risk turning their business around using a company voluntary arrangement. Also known as a CVA, this involves confessing to unpaid debts and forming a legal agreement with at least 75% of creditors that debts will be repaid over 3 to 5 years.

When low demand and profits drive a business into financial distress, the solution is not automatically insolvency. At the Credit Protection Association, we provide our Members with the debt recovery service to free up cash flow as well as the credit monitoring facilities to protect it.

The team at CPA chase outstanding debt; restoring financial power and encouraging the pursuit of expansion projects over insolvency. The combined weight of our credit reports, credit checks directorship register and County Court data, all provide Members with a comprehensive overview of current customers and suppliers. This should protect them from current threats as well as prepare them for any new trouble from the high street.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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