The West of England could see a “steep rise” in the number of corporate insolvencies this winter, a restructuring trade body is warning.
According to research from R3, there could be an increase as early as October.
The member survey of 海角视频 insolvency and restructuring professionals, found an overwhelming majority (93.7%) of respondents believed there would be an increase in businesses becoming insolvent.
Some 56% predicted the increase would take place between October and December, and more than half (56.1%) said numbers would be “significantly higher” than in 2019.
Respondents felt the main triggers for corporate insolvency advice over the next 12 months would be rent payments or arrears (61.7%), trade debts (49.7%), tax payments or arrears (48.1%), and wage payments (35.5%).
Although corporate insolvencies have decreased in the past few months, Philip Wnterborne, R3’s chair for the South West, says it is because Government support has “deferred rather than prevented” companies becoming insolvent.
During April and May, enquiries received by R3 members were mainly around advice on companies’ eligibility for the state-provided relief packages, rather than for formal insolvency support, he explained.
“Despite the lockdown and the continuing economic turmoil, corporate insolvencies actually decreased in recent months,” said Philip, a partner at Temple Bright Solicitors.
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“This is in no small part due to the Government’s support measures, which have helped a number of businesses which are struggling due to the pandemic.
“It’s clear from the survey results, however, that it’s a question of when, not if, corporate insolvency numbers increase.
“The support available to businesses has deferred, rather than prevented, the rise in corporate insolvencies expected in our current economic climate.
“We would urge anyone who is concerned about the future of their business to seek advice as early as possible.”