9,000 firms in significant distress
LITTLE HOPE OF UPTURN IN EARLY PART OF 2021, EXPERT WARNS
2020 was a devastating year for thousands of businesses and Q1 2021 seems to be offering little hope
Martin Buttriss
A NEW report shows a huge number of struggling businesses in Leicestershire.
Almost 9,000 county businesses found themselves in significant financial distress at the end of last year, according to research.
A report by insolvency firm Begbies Traynor suggested the county saw a 12 per cent increase in the number of businesses struggling between the third and fourth quarters of the year.
They were also up a third on the same period in 2019.
Nationally, the latest Red Flag Alert research recorded 630,000 businesses in “significant distress”, up 27 per cent year-on-year.
That represented the biggest quarterly increase (13 per cent) in financially distressed companies since 2017 – equivalent to 73,000 ailing businesses.
In Leicestershire, certain sectors faced greater problems than others, including real estate, property, telecommunications and
IT.
Martin Buttriss, partner at Begbies Traynor in Leicestershire, said: “These figures give an insight into some of the financial stresses that have been building in businesses over the past year. “Many businesses have been dealt another body blow by the latest lockdown. 2020 was a devastating year for thousands of businesses as they fell deeper into financial distress and Q1 2021 seems to be offering little hope of an upturn in the market.
“The government’s extended furlough and financial support measures will provide some relief and certainly save a significant number of businesses from entering into insolvency in the short-term.
“However, this simply won’t be enough to save every business.
“Although the UK’s announcement of a trade deal with the EU and the rollout of Covid-19 vaccines offer some light at the end of a very dark tunnel, it is likely to be some time before we see any sort of recovery.”