A sharp month-on-month hike in the number of debts held by East Midlands companies in liquidation should sound alarm bells for the region’s business owners.
The warning follows research from the Midlands branch of R3, the UK’s insolvency and restructuring trade body, which shows that the quantity of debts owed by liquidated firms in the region shot up by almost a fifth (18%) last month [April 2023].
R3 Midland’s figures, which are based on an analysis of data from business intelligence provider Creditsafe, also show that the number of late payments to East Midlands companies remains high at 23,744, although this April statistic is a marginal 0.54% decrease on the previous month’s figure of 23,872.
The current challenging trading conditions also appear to be affecting entrepreneurial spirit in the region, with the level of start-up businesses in the East Midlands falling by 16.7% in April to 2,335 from 2,803 in March.
R3 Midlands chair Stephen Rome, a director at law firm Thursfields in the region, said: “The huge challenges of our volatile business economy are impacting heavily on the region’s companies, which means it’s imperative for business owners to monitor their finances carefully and plan for all eventualities.
“It’s crucial that at the first sign of significant cash flow difficulties, relevant professional advice is taken. When R3’s members are called in to help early enough, there is a significant amount which can be done to rescue and support local businesses beyond traditional insolvency solutions.
“It can be helpful to know that R3 members offer a free initial consultation to those who are looking for support and wish to explore their options.”
