Corporate insolvency ‘set to rise in the coming years’

Posted 21/10/2009

UK companies have been warned to expect a rise in the rate of insolvency during 2010 and 2011.

Business recovery group Begbies Traynor has stated that the number of company failures occurring is set to increase, despite the fact that fewer firms are currently facing financial problems than 12 months ago.

According to the group’s third quarter report, evidence from previous economic downturns suggests that credit availability is likely to be insufficient for some time to come, meaning that insolvency will pose an increasingly large threat.

This conclusion has been supported by the UK Insolvency Helpline, which stated that both the corporate and personal finances of many business owners have been hit hard in recent times.

As a result, an increasing number of companies are looking to take initial advice on the legal ramifications of insolvency, a trend which is likely to continue.

A spokesman for the advisory service said: “We are expecting to see probably 20 per cent more calls a month and we are already getting that at the moment.”