Financial Tsunami ready to hit UK Economy
John A Waller
Financial Tsunami ready to hit UK Economy. Current support from the UK Government to aid businesses through the Coronavirus Covid-19 Pandemic does not help companies avoid insolvency but merely delay the inevitable. So what happens when support is insufficient to meet the company’s demands financially, even worse when support stops?
Many companies who should be in liquidation are still in existence and worsening the position of creditors.
The pandemic is an excuse for those companies who are not viable to remain still while causing chaos to their creditors.
Believe it or not, the latest stats show less insolvency, than the same month in 2019.
So is the UK heading for an economic collapse with company failures about to hit us.
Is it like a tsunami, building momentum from the earthquake, out at sea, but the wave has yet to hit land?
Should we not be concerned, the money saved over the last ten years or austerity has gone. How much money claimed fraudulently? An yet we still are on the wave knowing we are about to hit the beach.
Money does not grow on trees. (Believe it or not)
So, the money spent is in the system.
Well managed businesses, have though and continue to be saved.
However, history proves that businesses in the UK fail.
Though not so many in the pandemic. So what is happening?
Will we witness a rush of company failure once the government withdraws support ceases?
Yes. Big style to be blunt!
The UK government support and the inability to take action against failing companies means a vast tidal wave is about to hit the UK economically.
How will companies restart once it is over with support? Will companies restart?
Their working capital will have degraded, will the entertainment and leisure sector recover?
In November 2020, the number of company insolvencies in England and Wales fell by 41% compared to November 2019, due mainly to a decline in compulsory liquidations and CVs, which fell by 28 and 88 per cent respectively. Numbers of companies entering administration in November 2020 decreased by 51 per cent compared to 2019. Company Voluntary Arrangements fell by 29 per cent compared to 2019.
Four companies obtained a moratorium between the 26 June and 30 November 2020; four companies got a moratorium, and two companies received a restructuring plan, sanctioned by the court.
Let’s say you’re not sure how your business will survive the current climate?
How worried are you about Bounce Back Loans and Liquidation?
Seek robust, honest, professional advice today. The longer you leave your business in distress, the worse a liquidator will judge your position as a director.
Please contact HBG Advisory and arrange a confidential meeting today. We offer you higher ground support during these uncertain times.
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