250% jump in bust companies
February 6, 2009 by Admin
The number of large companies going bust leapt by 250% in the last three months of 2008 as the economic downturn took its toll.
Consumers also felt the pain asa the number of bankruptcies last year soared to the highest level since records began nearly 50 years ago.
The total number of businesses going bust, which covers administrations and liquidations, rose by more than 50 per cent as increasing numbers of firms struggled to access finance or secure insurance. But experts warned that the figures were set to rise higher in the coming year.
Malcolm Shierson, Partner at Grant Thornton’s Recovery and Reorganisation practice,aid “These numbers are bad, but they are going to get progressively worse as business and consumer confidence continues to fall.”
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“Companies across all sectors will struggle when they need to refinance their debt as lenders rein back on corporate lending. On top of this, the arteries of business are being clogged up as credit insurers cut back on the provision of cover for suppliers and contractors.”
Some 2,018 businesses entered into administration — the insolvency scheme usually used by larger companies — between October and December last year, up from 575 in the final quarter of 2007, figures from the Insolvency Service show.
