Businesses ‘still struggling with insolvency risks’

Posted 27/07/2011

Over half of all firms are showing some signs of being at risk of insolvency in spite of the slow improvements seen in the UK economy, one expert has noted.

President of trade body R3 Frances Coulson said many firms often struggle during the first stage of an economic recovery, as “it takes time before a return to growth translates into tangible relief”.

She stated the latest Business Distress Index from R3 shows 59 per cent of firms are experiencing problems such as falling sales or a dip in profits and added problems can be exacerbated by creditors being “more aggressive in their pursuit of debtors”.

This often occurs once signs of growth are seen in the economy, Ms Coulson observed.

Begbies Traynor’s latest Red Flag Alert revealed there has been a 12 per cent rise in businesses that are up against critical financial problems and Ms Coulson urged company owners that think they may be in trouble to seek assistance as soon as possible.

The team at Ashtons Legal can offer professional advice to any firms facing the prospect of insolvency.