High rate of insolvencies among North West companies
Regional businesses have the highest insolvency rates in the country, according to new government figures which give a regional breakdown of insolvencies for the first time.
The figures show that the North West is in third place in England and Wales in terms of business insolvencies. Just over one per cent of businesses in the region became insolvent in 2017, or 2,030 firms.
The average for England and Wales was 0.8 per cent.
According to R3, the insolvency and restructuring trade body, the figures reflect the North-South divide.
North West R3 chair Paul Barber, from Begbies Traynor in Preston, said:
Paul Barber said it reflected the difficulties businesses face when trying to grow.
He said: “These companies at most risk are those which are reasonably well established, but at the point that things can come unstuck. They are not as nimble as smaller counterparts but don’t have the economies of scale enjoyed by big businesses. They may be start-ups who have burnt through cash or companies who have tried to take the next step and got ahead of themselves.
“Growth can be risky if not managed properly. Founders may struggle to ‘let go’ and back office processes may not be able to keep pace. Access to finance might be an issue, and inexperienced directors may struggle to get to grips with working capital requirement. Growing companies need to be aware of the risks and seek professional help to steer them through.”