Thousands of London companies will collapse in event of “no-deal” Brexit
Thousands of London companies will collapse in event of “no-deal” Brexit, research claims today.
The research found that businesses in the capital and the South-East of England are at greater risk than those in other regions, due to their closer links with Europe.
The analysis suggests that 7,900 London companies will fail — with the loss of about 41,800 jobs — in the 12 months after Brexit, even if a deal is agreed with the European Union.
However, if the government fails to reach terms with the EU and the UK leaves the union in March without a deal, the total number of business failures is predicted to rise to 12,540, with 66,245 jobs lost.
The findings emerged when business intelligence firm Populous.World carried out a forensic financial health check on small and medium-sized enterprises (SMEs) with between nine and 249 staff across the UK.
Steve Nico Williams, chief executive of Populous.World, said: “London and the South-East will bear the brunt of the harsh effects of a no-deal Brexit. Even with a deal in place the upheaval, friction and uncertainty of Brexit next year will send thousands of London’s smaller companies into insolvency.”
Populous.World, which collects data from public sources such as Companies House, found that about three per cent of London SMEs were already struggling. About a quarter of those relied heavily on European business and were likely to be tipped over the edge by Brexit.
Combined with a predicted 9,697 business failures in the South-East if there is no deal, the total for the region is 22,237, almost matching the 23,886 forecast for the rest of England.
The research also revealed that the number of businesses being created in London had slowed sharply since the 2016 Brexit referendum, with a 14 per cent drop the year after the poll.
It predicts that a no-deal could see SME closures outnumber start-ups for the first time since 2009.
The findings follow a survey by the Federation of Small Businesses, which found that only eight per cent of those in London have started planning for a no-deal Brexit
How can CPA help?
Do you sell to businesses in London and the South East?
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports predict approximately 96% of insolvencies long before they arrive.
Our debt recovery services also chase down unpaid invoices and recover owed funds that our members can put back into their business.
Our members have used this extra cash to invest in new technology, equipment or merely to hire an e-commerce team to improve the online presence of the brand. At the same time, our credit checks and credit reports are utilised by our members to investigate all suppliers and customers. It is important to scrutinise everyone within your business, to ensure their financial history will show no bad payment behaviour or maltreatment of suppliers.
It can be considered a lesser risk for a business to shut up shop and stop selling on credit rather than continue trade in difficult conditions. This does not have to be the case, and our services at CPA can prove it.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
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