18/01/2024
2023 saw a record number of and the trend shows no signs of slowing in #2024. 📉💼
It is reported that a staggering 9,159 companies entered into some form of external administration (this includes, Voluntary Administration, etc.) in 2023, exceeding pre-pandemic levels. 📊🏛️
January, typically a quieter month for the industry, has been unexpectedly active with inquiries and appointments pouring in at an unprecedented rate. 📆🌊
This surge in inquiry indicates a challenging year ahead for struggling companies, with the and sectors appearing particularly vulnerable (73% increase in wind-ups in these industries over the last 6 months). 🏗️🍽️
So what is causing the rise in insolvencies?
The root causes of this rise in insolvencies are multifaceted. Beyond the expected factors of inflation, higher interest rates, and a more assertive office, there’s a discernible shift in creditors’ attitudes post-pandemic—from empathy to a more stringent focus on . 💸💡
Banks are also escalating actions at a record rate, hitting record highs in December 2023, as rising interest rates undermine loan serviceability. This trend is expected to persist in 2024 if interest rates continue to climb. 🏦📈
What should struggling do?
For businesses grappling with these external pressures, it’s imperative to assess legacy positions, prioritize reducing costs over increasing sales, and seek guidance (sooner rather than later) from and insolvency practitioners. 🔄💡💼
Law stands ready to assist directors and guide businesses through the turbulent waters of the insolvency landscape, offering personalised to help them navigate the challenges and emerge stronger wherever possible. 🤝🔍
