This was made up of 1,092 compulsory liquidations (up 5.5% on the previous quarter but down 10.2% on the corresponding quarter of the previous year), and 2,879 creditors’ voluntary liquidations (which were down 5.6% on the previous quarter and down 5.1% on the corresponding quarter of the previous year).
(According to the national insolvency statistics by www.insolvencydirect.bis.gov.uk).
These trends show that insolvencies are reducing over the although it will be interesting to see how the Christmas period and New Year affects these stats as Q4 is often a difficult time for businesses already struggling.
Considering the tough economy the UK and Europe has seen, there has been a lot less insolvencies than the economy would have suggested. This could be down to the creditors not wanting to let go of their customers and allowing them to become ‘zombie companies’. These are companies which are kept alive due to creditors allowing them to pay very little back in order to keep their custom. Perhaps these companies will be able to be turned around but only when creditors let them go.
Mark Jefferson is a seasoned commercial finance professional with over 25 years’ experience in financial services, much of that spent providing funding to SMEs. Mark has worked with many other firms in a similar situation to yours. Call Mark on 0800 157 7355 and you can also follow him on Google+
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