Surge in UK Businesses on the edge of collapse

According to the latest Begbies Traynor Group “Red Flag Alert” report, 47,477 businesses are starting the new year under ‘critical’ financial distress.

Across every monitored sector, the levels of critical financial distress grew quarter-on-quarter in Q4 2023, with the total number of businesses up 25.9% on the prior quarter (Q3 2023: 37,772).

Historically, a significant percentage of the businesses identified by Red Flag Alert as being in critical financial distress will enter insolvency over the course of the next year.

Julie Palmer, Partner at Begbies Traynor, said: “After a difficult year for British businesses that was characterised by high interest rates, rampant inflation, weak consumer confidence and rising and unpredictable input costs, we are now seeing this perfect storm impacting every corner of the economy.”

“Sadly, for tens of thousands of British businesses who should be looking ahead to 2024 with some degree of optimism, the new year will bring a fight for survival”, she said.

Top 10 Sector Ranking – Critical Financial Distress

1. Construction (7,849)
2. Support Services (7,096)
3. Real Estate & Property Services (6,228)
4. Professional Services (4,347)
5. General Retailers (3,133)
6. Telecommunications & Information Technology (2,830)
7. Health & Education (2,719)
8. Media (1,828)
9. Financial Services (1,373)
10. Food & Drug Retailers (1,343)

Given the current market conditions and levels of insolvency across the board, it essential to have appropriate protection in place for your business. To learn more about how Credit Insurance can protect your business in the event of one of your debtors entering insolvency, contact Clearview Credit today.

You can read the original Begbies Traynor Group article here.