The company insolvency statistics from January to March 2023 have been released, between 1 January and 31 March 2023 (Q1 2023), there were 5,747 (seasonally adjusted) registered company insolvencies. Industry experts give their views and thoughts below:
Ian Hepworth, director of Croydon-based Funding Solutions UK: I”Though insolvencies in the first quarter were down slightly on the fourth quarter of 2022, they are still far higher than the same period last year, and remain close to the highest level seen during the dark days of 2009 and the Global Financial Crisis. This reflects the fact that macroeconomic headwinds continue to bite. The withdrawal of government support from businesses, higher interest rates, stubbornly high inflation, wage demands and supply chain disruption have proved too much for many firms, and they are folding as a result.”
Bradley Lay, a business finance adviser at Bradley Lay: “While these numbers are marginally better than the final quarter of last year, compared to the first quarter of 2022 they are up by 18%, which is fairly substantial. Overall, this insolvency data paints a bleak and ominous picture of the economic landscape. For many businesses in many sectors, the future feels bleak and the economic climate is only going to get worse. During the past few years we have seen extreme uncertainty and instability in the UK economy, and it seems that this is a trend set to continue for several more years.”
Mark Grant of Gloucester-based business finance broker, The Business Finance Branch: “There is some encouragement to be taken from the fact that the number of company insolvencies in the first quarter of 2023 was 4% lower than in the final three months of 2022, but they are still 18% higher than the equivalent period of 2022. Though conditions on the ground remain extremely challenging, we are seeing many businesses proactively getting ahead of their liabilities where they can and lenders are willing to support viable cases. The future is brighter than had been forecast for many.”
Marcus Wright, managing director of Bolton Business Finance: “Sadly we are seeing an increase in businesses with large amounts of short-term borrowing that have simply run out of road. Energy bills in particular are hitting businesses seriously hard in some sectors like restaurants and hospitality. Add into that inflation and a less forgiving HMRC, and it means we will see far higher insolvencies this year. 2023 is shaping up to be a year to forget.”
Ed Rimmer, CEO of Bath-based SME finance provider, Time Finance: “Company insolvencies are the inevitable outcome of an unsustainable situation as more and more businesses struggle to make ends meet. Running a business is difficult enough, but having to contend with high inflation, soaring costs, supply chain challenges and weakening consumer demand is a rut many businesses simply can’t get out of. The real statistics we should be focusing on are how many businesses we can look to save by putting the right financial support and backing in place. This is something the Government must prioritise to ensure that we prevent more perfectly viable businesses from going under.”
