Hundreds of Swindon businesses ‘in serious financial trouble’
MORE than 1,500 Swindon businesses found themselves in ‘significant’ financial difficulty in the first three months of this year.
That’s according to the latest figures from Begbies Traynor’s “Red Flag Alert”, which monitors the financial health of UK businesses.
There were 1,571 local businesses in this category in the first quarter of 2022, down 3% from the figure in the fourth quarter of 2021 and 20% lower than at the start of last year.
Businesses related to telecommunications and IT and automotive saw the largest quarterly increases, registering increases of 9% and 8% respectively between the fourth quarter of 2021 and the first quarter of 2022.
Nationally, the latest Red Flag Alert search for the first quarter of 2022 recorded 581,596 businesses in significant distress, which is about the same as the previous quarter.
But there was a marked increase in the number of businesses deemed to be in “critical” distress, with a 19% year-on-year increase that had been driven by a 51% jump in the construction sector and a 42% jump. % increase among bars and restaurants.
There are serious concerns over a sharp rise in County Court Judgments (CCJs) as data revealed there were 11,673 decisions in March – a whopping 179% increase on the monthly average of the two previous years and the highest level in a single month for five years.
Julie Palmer, partner at Begbies Traynor in Swindon, said: “While the year-on-year data from Swindon businesses in great distress may be encouraging, the critical distress and CCJ figures highlight the problems. that accumulate in the system.
“For the first time in more than a decade, inflation is the top business concern as businesses battle rising costs.
“However, having invested so much money in protecting businesses over the past two years, the government will not want to see it wasted as businesses collapse, unable to repay their debts.
“Taking a hard line on the repayment of pandemic financing and other loans would likely drive many businesses to the brink, something no one wants to see as the economy struggles to recover.
“As such, there has to be a long-term view. For example, we might see corporate support through leniency in the repayment of pandemic funding, or an approach like war bonds, with extended tenors.
“However, any business facing financial difficulties, for whatever reason, should seek professional advice to fully understand the options available.”