With company insolvencies having fallen to their lowest level in two years due to high levels of government support, a North West insolvency expert is urging businesses to create a survival plan for when support measures come to an end.
Figures released by the government’s Insolvency Service show there were 686 company insolvencies in England and Wales in February – 49% lower than the same month last year and the lowest since January 2019.
Allan Cadman, North West chair of R3, the insolvency and restructuring trade body, says the figures show government measures have been successful in keeping companies afloat. However he warns: “Despite the fall in insolvencies, February continued to be tough for businesses, individuals and the economy. The national lockdown meant people weren’t able to celebrate Christmas and New Year as they have traditionally, which will have hit a crucial trading period for many businesses and had an impact on their success – and in some cases, survival – through the first quarter of this year.”
Allan, who is also a partner at insolvency firm Poppleton and Appleby, said: “Government support has been and continues to be a lifeline for many – and has stemmed rather than stopped the flow of insolvencies we would expect to see in this kind of economic climate.
“In addition, the usual ‘trigger points’ for action, such as winding-up petitions or repossession notices, are out of the picture at the moment, and our members say many company directors are putting off examining their options as a result.
“Now is the time for them to make the most of the Government’s decision to extend its support packages and plan ahead for when these measures end, and for anyone worried about their business finances to seek advice about resolving their situation.”