A sharp drop in the quantity of debts owed by firms in liquidation in the East Midlands, as well as a decrease in the number of local companies with overdue invoices on their books, is a welcome cashflow boost for the local economy as businesses head into 2024.
According to the Midlands branch of R3, the UK’s insolvency and restructuring trade body, levels of debts owed by businesses in liquidation in the region fell by 28.17% in November compared to October, while the number of local companies with invoices overdue for payment has continued to fall since May of this year. The latest monthly statistic for businesses with late invoices remains high, however, at 23,229.
R3 Midlands’ figures, which are based on an analysis of data from business intelligence provider Creditsafe, also highlight a mixed picture for start-ups in the region. While the number of new businesses fell by 4.43% in November compared to the previous month, the latest figure of 2,419 is 8.23% higher than 12 months previously in November 2022.
R3 Midlands chair Stephen Rome, a partner at the Midlands office of law firm Penningtons Manches Cooper, said: “East Midlands businesses have been battling economic issues for three-and-a-half years now, and corporate insolvency numbers have been rising as more and more directors run out of options.
“It is encouraging to see some improvements in cashflow conditions, as well as evidence of entrepreneurial appetite, but as we head into 2024, inflation remains high and core prices continue to rise.
“It’s impossible to predict whether the current Christmas trading period will be a badly-needed boost for local firms or the final blow. It’s critical, therefore, that directors are alert to any signs of financial distress and act on them promptly.
“There is a significant amount which can be done to rescue and support East Midlands businesses, beyond traditional insolvency solutions, if help is taken early enough.”
