According to latest figures, Corporate and Business Insolvencies fell by 27.1% for 2020 in England and Wales. Unfortunately the statistics do not tell the whole story as many businesses in the UK are in distressed situations.
There is a huge pile up of unpaid invoices in the UK with Small Businesses and organisations afraid to act. Many companies are simply waiting for ‘normal’ to return but nobody can actually forecast when that will be.
Leading B2B Debt Collection Experts Federal Management have warned of a ‘tsunami of unpaid business invoices’ over the coming year. A spokesman for the well established Commercial Debt Recovery firm advised that despite many Small Businesses being in Financial Dire straits, they are still reluctant to act.
Stephen Grant who is Azets restructuring and insolvency partner said in a press statement
“At face value, the reduction in corporate insolvencies seems like cause for celebration, but these numbers mask the true extent of the damage done by the pandemic,” Grant said in a press statement.
“There’s a bit of a wartime spirit out there as well – people are being quite forbearing. The government has obviously put in some support, and also the courts are effectively closed so nobody can really enforce anyway,”
The insolvency trade body R3‘s president Colin Haig said the government’s coronavirus support measures for business had “deferred” the economic effects of the pandemic. But warned that it had not “deterred” them.
Many experts within the Insolvency and Debt Collection industries are predicting a tidal wave of bad debts later in the year when lockdown measures ease.
The public wave of sentiment to help those ‘in need’ is being abused by many as a reason not to pay what they owe. The plight faced by many private landlords has already been highlighted with millions going unpaid in private rent.
With the furlough scheme set to end in April, a clear a definitive strategy is needed to help the the UK’s economy back on its feet. Businesses are being urged to take action now by way of pre-legal actions such as using professional debt collection solutions.
Business Owners are recommended they implement Credit control actions now or else face risking the possibility it could be too late.