More firms on verge of collapse as debts rise

SOARING numbers of Scottish businesses are on the brink of collapse amid spiralling debt and a slowdown of consumer spending.

Figures show an 18 per cent rise in the number of firms considered to be struggling, with levels rising faster in Scotland than elsewhere in the UK.

The data, compiled by business intelligence company Red Flag Alert, reveal there were 92 businesses considered in imminent danger of going bankrupt in the second quarter of this year.

This is compared to 78 at the same time last year.

The report also shows the average debt of a firm on the brink of collapse more than doubled in the past three years to £66,226, from £29,872 in 2016.

Scottish Conservative finance spokesman Murdo Fraser said: ‘This soaring number of Scottish firms on the brink of collapse should be a sharp wake-up call

‘Sharp wake-up call for the SNP’

for the SNP. It has failed to tackle Scotland’s low economic growth, which is also responsible for the £1billion black hole in the SNP’s finances.

‘The SNP must introduce a competitive tax regime to help support Scottish businesses and reverse these worrying levels of business distress.’

The Red Flag Data Alert, which monitors financial health, was published yesterday by insolvency specialist Begbies Traynor. It reveals there was an 18 per cent rise in the number of Scottish firms in ‘critical distress’ in the past year. This is compared to a 5 per cent rise across the rest of the UK.

Critical levels of distress are used to describe businesses which have had winding up petitions or decrees of more than £5,000 against them.

Business Minister Jamie Hepburn said: ‘While Scotland’s economy continues to perform well, with a close to record-high employment rate, these figures are extremely alarming.’