Half a million firms in significant distress –  business news 29 October 2020.

James Salmon, Operations Director.

Half a million firms in significant distress, ONS is even more pessimistic saying 64% are at risk economists call for additional support, covid-19, market and other business news.

Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.

Half a million firms in significant distress

More than half a million UK firms are in “significant distress” because of the pandemic, according to the latest Begbies Traynor red flag alert report for the past quarter.

The report revealed that 557,000 businesses are in significant distress as restrictions continue to cause instability for UK businesses.

There was a 6% increase in significantly distressed businesses between Q2 and Q3, taking the total from 527,000 to 557,000.

This is the biggest quarterly increase since 2017 and takes the total to the highest level seen since the reports began in 2014.

Despite low insolvency numbers due to the temporary protection given by emergency legislation for the shutdown, the underlying figures show that there is a huge back log of firms that would have gone insolvent but for the protections.

Begbies Traynor says ten out of the twenty-two sectors it analysed have experienced double-digit percentage increases in financial distress this yea

Julie Palmer, partner at Begbies Traynor, said “a perfect storm is on the horizon” for the turn of the year as the end of support measures is expected to result in insolvencies and redundancies. With so many businesses limping along there could be a flood of insolvencies when the courts do get back to anywhere near normal capacity and attempt to clear the backlog of pending cases”

She added “This in itself, combined with the end of the furlough scheme and other Government support measures, is likely to have a material impact on the UK business failure rate. A combination of a grim economic data, and very poor trading conditions, particularly in the most vulnerable sectors such as hospitality, will take its toll, and this is expected to feed through to next year’s first quarter, particularly when the Government ends its high profile corporate life support measures.”

The report also revealed a 14% increase in the number of food and drug retailers in significant distress since the start of lock-down in March.

Across all sectors, there has been a 9% jump in the number of companies in significant distress since March, representing around 48,000 firms.

Meanwhile, a report from EY and TheCityUK suggests a quarter of a million companies are at risk of collapsing under £35bn of unsustainable debt.

ONS report reveals insolvency risk

The Office for National Statistics (ONS) has released the results of its latest Business Impact of Coronavirus Survey, finding that two-thirds of all UK firms currently trading have a “low to severe risk of insolvency.”

The ONS analysis shows that 64% of businesses are at risk of insolvency, with 43% running on less than six months’ cash reserves.

The report also notes that 14% of UK businesses have paused trading under local lockdown restrictions.

Meanwhile, with almost 10% of the UK workforce still on partial or full furlough at the beginning of the month, the Trades Union Congress (TUC) has warned of a “tsunami” of job losses when the furlough scheme ends on October 31.

Economists call for extended support measures

Economists have urged Chancellor Rishi Sunak to extend the furlough scheme and increase support for businesses amid concern increasing rates of coronavirus infections could result in a nationwide lockdown that could trigger a double dip recession.

Capital Economics and Oxford Economics say Government support must be upgraded if lock-down measures are extended, warning of the risk of a higher rate of business closures and an economic slump.

Oxford Economics economist Martin Beck urged ministers to announce a “bigger and bolder” rescue package that would protect the economy under tougher lockdown rules.

Lord Skidelsky, emeritus professor of political economy at Warwick University, called for protection measures to be extended but warned that “even with generous support there are going to be many redundancies as the economy slows down”, while Lord Jim O’Neill, a former City economist and Treasury minister, said that if minsters pledge to replace the income of firms unable to trade under lockdowns, “they stand a chance of making it through the winter.”

APPG calls for BBLS replacement

The All-Party Parliamentary Group (APPG) for Fair Business Banking has called for the Government to replace the Bounce Back Loan Scheme (BBLS), with leader Kevin Hollinrake saying the group of cross-party MPs want a new scheme to be “rolled out really quickly”.

While the BBLS is set to come to an end next month, Mr Hollinrake said it should be immediately replaced by “a new iteration of the scheme” that would run into the middle of 2021.

Research by the APPG suggests that up to 250,000 small businesses could struggle to access the loans as they do not bank with accredited lenders.

Mike Cherry, national chair of the Federation of Small Businesses, said: “With a month to go until the BBLS is set to close, it’s vital that all small firms who need access to finance can do so in a speedy fashion so as to ensure that jobs and businesses can be safeguarded for the future.”

CBI chief: Deal delay leaves economy in ‘suspended animation’

Outgoing CBI boss Dame Carolyn Fairbairn says the economy has been left in “suspended animation” by the failure to secure a trade deal with the EU despite the end of the transition period edging closer.

She said: “The economy has gone into suspended animation while we resolve this seismic issue. I hope we can have a resolution so we can move on.”

Dame Carolyn also rejected the suggestion that the UK would prosper under a no-deal scenario, saying an agreement with the bloc would be “enormously better” than none.

She told the Guardian: “The thing that’s painful is that it has taken so long to get to a resolution. I think we will get a deal. The remaining issues look soluble.”

Covid-19 general news

With 530,581 new cases, global cases are around 44.5 million as deaths exceed 1.17 million.  The UK had 24,701 new cases yesterday.

PM Boris Johnson is facing pressure to enact a new national lock-down, something his government has fought to avoid, as projections put the country on track for a second wave over the winter that could be worse than the first wave. Infections are doubling every nine days and an estimated 960,000 people are carrying the virus in England on any given day, according to findings from Imperial College London and Ipsos Mori. The virus’s reproduction rate has risen to 1.6, from 1.2 on the 9th.  The government’s emergency scientific committee predicts all of England is likely to require the tightest restrictions by mid-December.

An international team of scientists tracking the virus’s genetic mutations says a variant that originated in Spanish farm workers has spread through much of Europe since the summer, accounting for a majority of new Covid-19 cases in several countries — including more than 80 percent in the U.K.

Germany & France are ramping up lock-down restrictions to stem the rapid spread of covid-19. German Chancellor Angela Merkel met state premiers yesterday to discuss closing pubs, bars and restaurants for one month across the country and enforcing a ban on all social mixing after new cases broke the 20,000 level for the first time with 23,553.

France meanwhile imposed a second national lockdown. President Emmanuel Macron said that the coronavirus is now spreading faster than the most pessimistic projections had allowed. Frenchmen venturing outdoors will need to carry documents for police to check although schools will remain open.

Anthony Fauci, the U.S. government’s top infectious-disease expert, said a vaccine won’t be available until at least January and mask use is critical to avoid crippling shutdowns.

India reached the 8 million case milestone.


Shares tumbled yesterday as fears over increasing Covi-19 deaths and hospitalisations across Europe spooked investors with stocks falling globally. Mining shares, Banks, Housebuilders and Insurers all suffered heavily in London.

Covid-19, Brexit and the US election are a trifecta of worry for traders.

In London the FTSE 100 index declined by 2.6% bringing us close to lows last see at the height of the  first wave of the pandemic in March. The 250 dropped 1.9%. In Europe the German index fell over 4% while the French market dropped over 3%. With its worst day since June, The S&P 500, NASDAQ  and Dow all dropped by more than 3%.

Foreign exchange by contrast is rather steady. The pound is at 1.300 US Dollars and 1.109 Euros.

Oil fell 4% and gold dropped more than 1% as investors moved into the US dollar.

The ECB is meeting today and economists are predicting they might seek some preemptive action to support the economy.

Property sector calls for stamp duty holiday extension

The property sector is urging Rishi Sunak to extend the stamp duty holiday by six months, with industry bodies writing to the Chancellor to warn that the sector does not have the capacity to process the enormous volume of sales in the pipeline before the tax holiday expires on March 31. Signatories, who come from bodies representing estate agents, conveyancers, surveyors and mortgage brokers, told Mr Sunak: “We are concerned that consumers continue to offer on properties expecting to benefit from the stamp duty rate reduction but in reality they may be too late.” They argue that a six month extension would allow deals to complete and “avoid a disorderly and distressing period” for buyers and sellers – and prevent transactions “falling off a cliff edge”. This comes with analysis from data agency TwentyCi suggesting that 325,000 buyers could miss out on the tax break if the deadline is not extended

Stamp duty holiday boosts property pipeline

Analysis from Zoopla shows that there are 140,000 more homes currently progressing through the system than at this time last year, with a rush to get deals over the line before the stamp duty holiday comes to an end in March 2021. The property platform says more than 400,000 property sales worth £112bn were working their way through the pipelines in October. The report says that sales agreed were up 40% to 60% between July and October compared to the same period last year, with a peak increase of 62% recorded in August. Zoopla’s price index shows that annual house price growth is running at 3%, up from 1.1% in October 2019.

M&C Saatchi profits hit

Profits at advertising group M&C Saatchi have fallen nearly 60%, with pre-tax profits hitting £2m for the six months to June. Revenues fell 30% to £149m amid “extremely challenging economic conditions” from coronavirus. The firm’s shares remain suspended after it missed a September deadline to file its annual results to December 2019. M&C Saatchi was last year caught up in an accounting scandal, having overstated profits by £11.6m despite auditor KPMG signing off the accounts

EY: Scotland appeals as a financial services destination

An EY report on Scotland’s finance sector suggests the country will top the rankings of key European finance hubs for life satisfaction in 2021. The report said Scotland had “consistently” improved its life satisfaction score in relation to European peers, including the UK as a whole, the Netherlands, Ireland, Germany, France and Luxembourg. Scotland has risen from fourth in 2011 to second in 2016, and will be top in 2021, said EY. Sue Dawe, head of financial services at EY in Scotland, said the nation had an “extremely strong case to compete” as a finance hub.

Banks could follow rivals on fees

With it suggested that some banks may look to introduce charges for current accounts, experts believe that rivals will be quick to follow suit once charges for basic banking services are in place. Simon Westcott, a financial services expert at PwC, predicts that “the industry would seek to move quite quickly together” if one bank starts charging.

5G & BT

BT Group has signed a deal to use Ericsson’s 5G radio antennas, base stations and other equipment to upgrade its EE mobile network. BT said in time it expected 50% of all its 5G traffic to be transmitted via the Swedish company’s kit.

BT Group also raised its guidance after first-half profit fell 20% as revenue was hit by the pandemic-led reduction in BT Sport revenue and business activity. The company raised the lower end of the adjusted EBITDA outlook range for 2020/21 to £7.3bn, with a range £7.3bn to £7.5bn expected.


GlaxoSmithKline warned that it expected to post annual earnings at the lower end of its guidance range after its operating profit fell 13% in the third quarter. The company said it expected adjusted earnings per share for the year through December to fall at the lower end of a 1%-to-4% range, on a constant currency basis.


Royal Dutch Shell beat expectations with its latest earnings report and announced plans to increase its dividend. The company reported adjusted earnings of $955 million for the three months through to the end of September. That compared with a net profit of $4.77 billion over the same period a year earlier, and adjusted earnings of $638 million for the second quarter of 2020.


Lloyds beat forecasts for the third quarter after lowering its provisions for expected bad loans and cashing in on booming demand for mortgages. The bank reported a pre-tax profit of £1bn for the three months to September, well ahead of the average of £588m forecast by stock analysts.

Apple search & Big tech

Apple is reportedly ramping up efforts to develop its own search engine technology as US antitrust authorities put Google’s market dominance under the spotlight. In iOS 14, the company’s latest iPhone software, Apple now shows its own results when users type queries into the search bar on the home page.

The American senate accused the chief executives of Alphabet, Facebook and Twitter of abusing their power at a Senate hearing. Congress wants to update Section 230 of the Communications Decency Act, which gives some online platforms legal immunity from the content users post. The tech leaders, appearing virtually, defended the rule.

Luxury merger

LVMH’s takeover of  the US jeweler Tiffany is back on, after they lowered their asking price. LVMH, the French luxury-goods conglomorate, struck a deal for $16.2bn in November 2019, but dropped their bid in September, citing trade tensions and the pandemic. The new price is $15.8bn, “just” £400m less.


Boeing will cut 7,000 more jobs as the firm reported its fourth straight quarter of losses, losing $446m in the last quarter. By the end of 2020 Boeing will have shed 30,000 jobs – 20% of its 160,000-strong workforce.

Don’t let Covid-19 bust your business!

It will if your cash flow dries up, either sooner or later.

The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.

CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.

To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.

  • The annual package costs start at very low rates
  • A minimum performance warranty is provided
  • Several complimentary services included

Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).

A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?

Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.

When you see your money come in, you will be so glad you used CPA.

Do you sell on credit?

With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.

Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.

You can’t just assume your customers can and will pay you eventually, no matter how big their name is.

It is essential to have credit management systems in place to monitor and check your customers credit worthiness.

It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.

About CPA

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

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. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply on credit, help us help you identify the risks.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

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.

You might be hesitant about contacting a debt collection agency. What are they going to be like?

Can they help your particular type of business?

There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.

Debt collection agencies are not all alike.

Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!

At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.

The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.

We are polite, firm and efficient when it comes to recovering outstanding debt.

“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire

“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections


Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs, with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

You put up with the PAIN – now claim the GAIN!

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?

How many of your invoices are paid late each month – 20, 50, 100 or more?

At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim! 

At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!  

Yes, CPA can help you boost your business cash-flow.

Don’t let your bankers control you, contact CPA today.

Discover NOW the potential value of late payment compensation hidden in your sales ledger!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you realise you could be sitting on a fortune?

Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.

If you sold B2B on credit then there may be a hidden source of capital you can call on.

If you fancy an extra bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.

Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.

We can help you uncover the pile of gold, you didn’t even know you were sitting on.

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.

Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.

You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.

That compensation could provide the cash boost your business needed.

But don’t delay, that compensation evaporates if not claimed within six years of the late payment.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

Those former clients who regularly paid you late can finally be made to pay.

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

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!

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.

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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.