Small Businesses

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The latest study by Begbies Traynor indicates that over 50% of small firms in the UK have the sort of ‘toxic debt’ that they will find difficult to pay off during the next year.

This research by the business recovery specialists shows that smaller firms in the property and hospitality sectors are the ones that are most likely to have that level of debt in the wake of the Covid-19 pandemic. Begbies Traynor is stating that its figures show that September saw a total of 1,446 firms going bust, which is 100 more than during August and 56% higher than the total for September 2020.

The Bank of England has already said that it is anticipating small firms to go bust at a higher rate between now and the end of the year, as the return to post-pandemic normality means that landlords are once again able to seek winding-up orders against firms that cannot pay rents.

It is a difficult situation for smaller companies that have been badly affected by the pandemic. Getting advice from affordable accountants in Goole or elsewhere could help some with heavy debts to find a way forward.

Debt levels among smaller firms reached record levels last year, as they were forced to borrow money to keep going during the lockdowns. There was an 82% rise in such borrowing, taking the total debt to £213 billion.

Many small firms remain optimistic though, with just 16% stating in a recent Lloyds Bank survey that they worry about repaying debts.

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