Research from company restructuring firm Begbies Traynor shows there has been a 40% increase in the number of businesses going through extreme financial distress in the last three years since the EU referendum.
489,000 businesses in the UK within the property, construction, retail and travel industries have suffered the worst. Over the past year significant financial distress has increased in over 90% of the industries monitored by the research company, showing that this downturn in financial performance is affecting a huge range of businesses. We only have to look at the recent news on Thomas Cook, Bonmarche and Patisserie Valerie as evidence to this with the former causing the largest repatriation operation of Britons since WW2.
There was also an increase in the number of businesses under extreme financial distress in the past year, usually a tell-tale sign of impending insolvency. And this trend seems to be recurring with an 8% rise annually. Clearly these figures are very concerning as is their relationship to the current political and economic uncertainty.
Julie Palmer, Partner at Begbies Traynor, said “Three years on from the referendum and the latest Red Flag research highlights just how businesses are struggling as a result of uncertainty and a lack of investment. With a considerable increase in the number of businesses suffering significant financial distress in the last three years, there is growing frustration among businesses that they cannot plan for the future and the whole economy is lagging as a result.", Source - Credit Connect
What the experts are saying is as a result of company investment being on hold, businesses feel they are treading water with both hands tied behind their backs, not knowing what their business or their trade will look like post-Brexit. The uncertainty with their current agreements and contracts vs what may need to be put in place to continue trading is contributing to stagnant nationwide growth.
Until businesses and consumers are given vision and clarity on the economic situation after Brexit, this stagnation will remain consistent for a considerable period.
To get your outstanding invoice debts collected effectively and keep the cashflow coming into your business to survive these financially turbulent times, speak to us on 0208 720 7309 or email firstname.lastname@example.org