Amidst the excitement of the Northern Powerhouse you’d be forgiven in thinking that things could only go from strength to strength for the North West business community. However the latest statistics released from Begbies Traynor’s Red Flag Alert proved that this was far from the case, revealing that a proportion of the region’s companies are battling with significant financial problems. In total 26,084 businesses are struggling with debt management issues, a 14 percent increase on the last quarterly report.
Despite the positivity surrounding the nation’s economic climate, businesses are evidently struggling to contend with a number of factors that are causing detrimental damage to their financial security. In particular, the construction, retail, tourism and leisure sectors were the hardest hit as mounting problems continued to put businesses under further financial pressure.
It is believed an increase in late payments is largely responsible for the increase. Late payments not only prevent businesses from maintaining a healthy cash flow, but also leave companies vulnerable to an increased risk of financial difficulties in the event unforeseen problems were to arise.
Likewise, overtrading has also proved similarly destructive to the well-being of firms. The pause in trading activity in the run up to the general election caused a number of businesses to take advantage of new opportunities which many are now unfortunately unable to deliver.
Before businesses go into panic mode there is some light at the end of the tunnel. Although there has been an increase in companies struggling with financial issues, the number facing critical problems such as insolvency or bankruptcy has fallen. Overall businesses are much better equipped to effectively deal with issues catching them at the early stages.
In the event your business is facing financial issues it is essential you seek advice at the earliest opportunity. If you let circumstances drag on and develop, the options available to you will reduce. Here at Farleys our specialist commercial solicitors have a wealth of experience involving corporate recovery strategies and dealing with business insolvency. For further information on how we can assist your business contact a member of our team today on 0845 050 1958, alternatively please complete an online enquiry form.