East Midlands entrepreneurs are fighting back against current economic challenges with a rise in start-ups in the region and a decrease in the amount of businesses in liquidation with outstanding debts.
This is according to the Midlands branch of national insolvency and restructuring trade body R3 and is based on an analysis of data from business intelligence provider Creditsafe.
R3’s figures show a month-on-month increase of 16.6% in the number of companies set up in the East Midlands in October, rising from 2145 to 2500, while the number of businesses in liquidation in the region who owe money to their creditors has fallen by 29.1%.
R3 reports, however, that insolvency-related activity in the East Midlands – which includes liquidator and administrator appointments as well as creditors’ meetings – has risen by 29.2% over the same period, but this increase should be taken in context.
R3 Midlands Chair Stephen Rome, a partner at Penningtons Manches Cooper in the region, said: “The increase in insolvency activity, coupled with latest national statistics from the Insolvency Service, suggest directors are seeking early professional advice – a key campaign focus for R3.
“The indications are that there are more companies that have the potential to be rescued via a sale out of Administration, which is the preferred outcome for members of the profession.
“Without doubt, we continue to experience an unstable economic backdrop, but if business owners can get help at the first sign of a signifiant problem – such as late customer payments, low working capital and rising overhead costs – the more likely it is that a company can be rescued and returned to profitability.
“Many R3 members offer a free initial consultation to those who wish to explore their options.”
