An insolvency expert has urged Bristol’s directors to seek advice at the first signs of business distress following the release of statistics showing corporate failures have risen by more than 40% over the past year.
Philip Winterborne, South West chair of trade body R3, made the plea after third quarter figures from the Insolvency Service revealed a 43.5% leap in corporate insolvencies compared to the same period in 2020.
These are the highest quarterly figure since the pandemic began and are a sign that its economic damage is now translating into levels of corporate insolvency, he warned.
“The increase we’ve seen in the figures has been driven by a rise in Creditors’ Voluntary Liquidations – to the highest quarterly total in 12 years,” Phillip, pictured, said.
“This would suggest that after trading for more than a year and half during a pandemic, Bristol company directors are deeming future survival unlikely and are making the difficult decision to close their businesses.”
Philip, a partner at Bristol law firm Temple Bright Solicitors, added that over the past three months, businesses had faced a perfect storm of rising energy prices and labour market and supply chain issues, coupled with the winding down and withdrawal of the government’s support measures.
“In addition to this, consumer confidence declined over the late summer and early autumn as people, worried about their finances and the future of the economy, cut back on their spending,” he added.
“As we enter the winter months, directors need to be alert to signs their business might be distressed.
“These may include cashflow issues, problems paying staff, suppliers or any other overheads and increasing stock levels.
“My advice is to seek help as soon as any of these issues present themselves, or if you have any worries about your business and its finances.
“We know how hard it is to talk about financial difficulties. But most insolvency professionals’ initial consultations to identify recovery options are given free of charge.
“And having that conversation before your problems spiral out of control, usually gives you more options and potential solutions and more time to consider and implement them.”
