More than 3,000 Shropshire businesses in deep financial trouble

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These figures represent a decrease of 4% in the number of companies in difficulty between the fourth quarter of 2021 and the first quarter of 2022, also representing a decrease of 21% year-on-year compared to the same period in 2021.

However, if we look at the situation of the sector, the sports and health and the industrial sector saw the highest quarterly increases, with respective increases of 12 and 11% between the fourth quarter of 2021 and the first quarter of 2022. .

The figures come from Begbies Traynor’s ‘Red Flag Alert’, which monitors the financial health of UK businesses.

Nationally, the latest Red Flag Alert search for the first quarter of 2022 recorded 581,596 businesses in significant distress, which is stable from the previous quarter. However, the figures also showed a marked increase in the number of businesses considered to be in “critical” distress, with a 19% increase year-on-year, driven by a 51% jump in the sector. construction and a 42% jump among bars and restaurants.

There are also concerns about a sharp rise in County Court Judgments (CCJs) as data revealed there were 11,673 decisions in March – up 179% from the two-year monthly average previous ones – and the highest level in a single month in five years. .

Mark Malone, partner at Begbies Traynor in Shropshire, said: “While the year-on-year data from Shropshire businesses in dire distress may be encouraging, the critical distress and CCJ figures highlight the problems accumulating in the system. For the first time in more than a decade, inflation is the top business concern as companies 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 crumble, unable to repay their debts. Taking a hard line on repaying pandemic financing and other loans would likely push many businesses over the edge, 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 could see business support through leniency in the repayment of pandemic funding, or an approach like war bonds, with extended tenors as ministers follow the adage that a rolling loan generates no loss.

“However, any business facing financial difficulties, for whatever reason, should seek professional advice to fully understand the options available.”

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