Bahama Times

Thursday, Mar 28, 2024

Warning that thousands of firms face collapse

Warning that thousands of firms face collapse

There are growing fears that 2023 could see a wave of company collapses as the cost of living crisis continues.

The number of firms on the brink of going bust jumped by more than a third at the end of last year, said insolvency firm Begbies Traynor.

It expects this number to rise due to higher costs and consumers cutting back their spending.

Paul Jones, co-founder of brewery Cloudwater Brew, said the pressure felt like a "never-ending nightmare".

Julie Palmer, partner at Begbies Traynor, said it was receiving an increasing number of calls from businesses owners like Mr Jones who were concerned over whether they could carry on.


'Survival mode'
Paul Jones says he feels like continuing his business is either not possible or not worth it


Mr Jones said his Manchester-based company has been in survival mode since March 2020, with high costs, debt, low consumer confidence and post-Brexit trading problems all bearing down on the business.

"The cost to me has been pretty bleak," he said. "I have a heart condition from stress and I feel constantly on the edge of what I can personally cope with."

His thoughts have turned to closing his business "probably once a month since 2020," he said.

"I feel like continuing is either not possible or not worth it," he said. "We're going to keep going. What else can we do?"

But he remains downbeat about business prospects in 2023.


Financial distress


Begbies Traynor said the number of companies in critical financial distress jumped by 36% in the last three months of 2022.

A firm is in critical financial distress if it has more than £5,000 in country court judgments or a winding up petition against it.

The number of county court judgments served against companies in the same period jumped by 52% compared with 2021.

Ms Palmer said that up until now low interest rates and loans had helped firms. In the pandemic, Covid loans and a longer time to pay taxes had meant that support had continued.

"[The support] all seems to be coming to an end at the same time, with nothing really on the horizon in terms of what might replace them," she said.

A backlog in the insolvency courts due to Covid has also delayed some company collapses.

"The courts were closed for business so nobody could take recovery action against non-payers and we are beginning to see those cases pushed through now," she said.

Chef Mary-Ellen McTague had to close her restaurant last year


This cocktail of challenges has already proved lethal for some.

Chef Mary-Ellen McTague set up a restaurant The Creameries in Manchester back in 2018. It received rave reviews and was trading well until the pandemic hit the following year, and the business never fully recovered.

High energy costs were the final straw. She had to close the restaurant in September last year.

"It became apparent that no matter how hard I worked, how hard I tried, how many different tactics we tried to turn it around, we were just never going to get enough customers through the door to make it work. And that was a horrible moment," said Ms McTague.

She said running a business during such a difficult period took a huge emotional toll.

"I think it can be a really lonely experience being in that position," she said.

"If you are the head of a small business, you've got close relationships with your staff, your suppliers. And you don't want to worry anyone, so you don't necessarily talk to your friends, family, or even your partner about it," she added.

"You don't want to worry your children. There's a lot of trying to keep the worry from others, which means you hold it in yourself.

"There's still quite a lot of stigma around it, and feeling this sense of shame of things not working out, even when it's completely out of your hands."

She admitted that she had mixed feelings when she finally had to close the business

"Once you're at the point where you can see what's going on and you can't make it better, there is definitely a sense of relief afterwards."


'Little investment'


NatWest boss Alison Rose said that while the UK's biggest business lender is yet to see widespread company failures she is concerned that firms are unable or not confident enough to invest for the future.

"We are seeing very little investment thanks to very low business confidence. That for me is a real concern because it will affect future growth."

But there were still reasons for optimism in 2023, she said.

"If you think we have had a global pandemic, the end of low interest rates, a war in Europe, massive price rises - what we have seen is incredible resilience in UK business," she said.

"We are also at full employment which is really positive. We are seeing record number of start-ups and banks like ours that is in a strong position to support customers. So it is a tough environment, but we should never forget how resilient business owners have been."

Newsletter

Related Articles

Bahama Times
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×