An insolvency practitioner at one of the country’s leading accounting firms is urging business owners to seek advice early or risk liquidation being the only option available amid rising company insolvencies.
The warning comes as quarterly insolvency statistics for July to September (Q3) 2022 reveal formal corporate insolvency appointments are currently over 50% higher than levels in 2021.
Nicola Banham, Insolvency Director at Azets, the UK Top 10 firm, believes more businesses can be saved from liquidation, with insolvency procedures designed to protect businesses from closure.
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She said: “These latest insolvency statistics for Q3 evidence a significant increase in the volume of companies feeling financial stress. There were 16,105 corporate insolvencies in the first three quarters of 2022 compared to 9,433 during the same period in 2021 – a 71% rise.
“This pressure will continue to build as companies face ever increasing costs at a time of prolonged economic uncertainty. Alongside this, the cost of servicing debt is rising due to increasing interest rates, which are expected to continue to rise and further exacerbate matters.
“The most common insolvency procedure is liquidation – bringing the business to an end. Directors should seek advice from an insolvency practitioner at the earliest opportunity, to understand the alternative options available which may save some or all the business.”
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