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Economic Development

Over 50,000 North West businesses now in 'significant financial distress'

The rise could have been much higher were it not for reduced court activity due to the coronavirus pandemic

Gary Lee, partner at Begbies Traynor in Manchester(Image: Giles Rocholl Photography Ltd )

Over 50,000 North West businesses are currently operating under "significant financial distress", new data released today has shown.

The latest Red Flag Alert data from Begbies Traynor has shown that during Q2, there was a 9% year-on-year increase in the number of distressed firms.

The figures from the corporate restructuring firm say that since the beginning of the pandemic in the 海角视频,  an additional 3,357 have fallen into distress - bringing the total to 51,010.

Greater Manchester is now home to 21,442 troubled firms - an increase of 10%, while the Merseyside region has 7,413.

Experts at Begbies Traynor said the rise could have been much higher, were it not for reduced court activity due to the coronavirus pandemic, which has substantially reduced the number of CCJs and other legal action being taken against indebted companies.

Key sectors of the regional North West economy have seen double-digit increase in distress over the past 12 months.

Gary Lee, partner at Begbies Traynor, said: “These figures are alarming but the real pain is likely to begin when the Government furlough scheme is withdrawn, bounce-back loans are spent and the courts reopen for enforcement action.

“This crisis will force many companies out of business. The reality is that many businesses across our region are unviable due to high levels of debt and poor sales. Company directors must take swift action if they’ve exhausted their Government support options and levels of business continue to decline over the coming weeks.