- 8,805 businesses now in ‘significant distress1’, a 9% increase from Q3 to Q4 2020
- 28% year-on-year increase in ‘significant distress1’ (1,904 businesses) since Q4 2019
- Financial distress increases across all 22 sectors monitored
Almost 9,000 businesses on Merseyside are now in significant financial distress, according to new research published today by Begbies Traynor.
But Begbeis Traynor says there are some proactive things that business owners can do to survive and thrive despite the gloomy figures.
The latest Red Flag Alert research for Q4 2020 has recorded 8,805 businesses in ‘significant distress’. This 9% increase (from 8,073 in Q3 2020) comes as the UK economy battles the third nationwide lockdown.
The research also confirms a 28% year-on-year increase in significantly distressed companies since Q4 2019 (6,901 – Q4 2019, 8,805 – Q4 2020).
Distress in the financial services sector increased by 42% (from 130 in Q4 2019 to 184 in Q4 2020), real estate and property services saw an increase of 35% (865 to 1,172) and distress for hotels and accommodation increased by 25% (81 to 117).
Every single one of the 22 sectors monitored by the Red Flag Alert research exhibited an increase in significant distress, with 10 sectors experiencing double digit increases in the final quarter of 2020 – a worrying sign for the regional economy.
Keith Tully, partner at Begbies Traynor in Liverpool, said:
“These figures highlight the deteriorating financial situation for many companies across our region. Without the financial aid and support measures that the Government has put in place during the pandemic insolvency levels would have been much higher. A national lockdown policy with no concrete end in sight does little to help worried business owners and their finance directors.
“Company directors who are running a distressed business must explore all their restructuring options now if they are to survive. Getting together a proactive creditor strategy, fresh re-financing package or a tax efficient disposal of the business needs to be high on the boardroom agenda to survive the weeks and months ahead.
“The roll-out of the vaccine offers some light at the end of the tunnel but the financial situation for many businesses will remain bleak over the next quarter and beyond.”
For advice company directors in Liverpool can contact Keith.Tully@btguk.com or Jason.Greenhalgh@btguk.com
