Experts warning over virus insolvencies rise
The latest official business insolvency figures don’t yet show the true economic impact of the coronavirus pandemic, say financial experts.
Alexandra Withers, North East chair of insolvency and restructuring trade body R3, says figures which show corporate insolvency numbers fell very slightly between March and April, represent the ‘calm before the storm’.
Ms Withers was commenting on Insolvency Service figures which show a small drop in the number of new corporate insolvencies between March and April – from 1,234 to 1,196.
She said: “The first set of monthly figures do not yet provide a particularly clear picture of how the pandemic is affecting business insolvencies.
“We welcome the decision to publish figures for insolvencies every month for the period of the pandemic, as these numbers will give more immediate feedback on how businesses, consumers and the wider economy are being affected.”
She added: “Our members are telling us the enquiries they’re receiving are mainly for advice and support, rather than necessarily for COVID-induced insolvency processes.
“Directors want to understand how to manage their cashflow, what options are open to them operationally and what the finer points of the Government’s support measures mean.”
“The figures show corporate insolvency numbers fell slightly but this is very much the calm before the storm.”
She added: “Now more than ever, owners and managers worried about their company’s financial situation should seek advice urgently from a professional and reputable source.”