Confidence is starting to return among East Midlands entrepreneurs after a steep fall in the number of businesses set up in the region in April and May, but a sudden hike in the number of local companies with late payments highlights the perilous financial position many are forced to navigate due to current economic challenges.
This is according to the Midlands branch of national insolvency and restructuring trade body R3 and is based on a monthly analysis of regional data from business intelligence provider Creditsafe.
R3’s figures show there were 2,519 businesses set up in the East Midlands in June, which is a 17.77% increase compared to the 2,139 new businesses registered in May. The June figure is the highest percentage rise in the UK and is also almost one fifth higher (17.66%) than the 2,141 start-ups established twelve months previously in June 2024.
In contrast, however, the number of companies in the region with late payments on their books rose sharply in June to 25,710 from 24,269, which is the highest monthly total for the East Midlands over the past 12 months.
R3 Midlands chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “It is encouraging to see East Midlands entrepreneurs rallying against the effects of a very uncertain economic outlook, which includes tax rises, tariffs and spiralling fuel and energy costs.
“At the same time, however, it is concerning to see the rise in the number of local companies with invoices on their books which are overdue for payment. This is leaving many businesses in an increasingly perilous cashflow position and highlights the importance of taking sound steps to minimise financial exposure at all stages of a company’s lifecycle.
“For those directors with serious cashflow concerns, whether the business is a start-up or more established, R3’s advice is to seek professional help and to do it as soon as possible. The sooner support is sought, the more opportunities there may be to assure a company’s survival and future success.”
