Insolvency practitioners in England and Wales predict that even after the recent high street insolvencies, including household names like Woolworths and Whittards, there will be even more to come in the next three months.
Insolvency practitioners expect to see this peak to 19,796 in 2009. This is a 26% increase on predictions insolvency practitioners made for 2008.
Sarah Walford from business advisers Cooper Parry says, “It’s likely we have not yet seen the worst, so we would urge any businesses worried about their financial position to seek professional advice early whilst there are still options.”
Many insolvency practitioners believe that this downturn will be deeper than the 1990s recession; over two thirds think this one will last longer, and three quarters think more businesses will close this time around.”
Sarah continued, “Businesses become unviable for a number of reasons not necessarily due to the economy.”
However, most insolvency practitioners agree that the increase in corporate insolvencies is due to the economic downturn, followed by a change in banks’ lending practices. This shows we are set to lose businesses which otherwise might not have been vulnerable.
Sarah added, “It’s vital to act now in readiness for the upturn in the economy which is predicted for 2010-2011.”