Companies Will Go Bust After Recession
Now that we're out of the recession more companies than before are expected to go bust. Insolvency experts have said around 28,000 will go bankrupt in 2010, 5,000 more than last year.
This is a common occurrence after a severe economic decline. In the recessions of the 80's and 90's unemployment peaked 2 years after recovery.
The reason for this happening is firstly because of an increased demand by customers from business owners for which they don't have the capital. The second reason is that loaners who may have lent to struggling owners during the crunch now expect payments quickly and the business owners are unable to pay this straight away.
There had been various help given by the government during this period including more loans and allowing taxes to be paid later. Some small to medium enterprises even had to take overdrafts which according to the British Bankers Association has amounted to £9B. Some want bankers and loaners to now be more flexible about receiving payments.
To prevent ones business becoming insolvent, Louise Brittain, the insolvency specialist at Deloitte, recommends seeking advice from professionals as soon as one feels they may be in difficulty. Speak to your bank and major creditors to make arrangements for cash flow issues and do this early.
Source: Working Lunch, BBC. (27-01-2010)
Companies Will Go Bust After Recession
This is a common occurrence after a severe economic decline. In the recessions of the 80's and 90's unemployment peaked 2 years after recovery.
The reason for this happening is firstly because of an increased demand by customers from business owners for which they don't have the capital. The second reason is that loaners who may have lent to struggling owners during the crunch now expect payments quickly and the business owners are unable to pay this straight away.
There had been various help given by the government during this period including more loans and allowing taxes to be paid later. Some small to medium enterprises even had to take overdrafts which according to the British Bankers Association has amounted to £9B. Some want bankers and loaners to now be more flexible about receiving payments.
To prevent ones business becoming insolvent, Louise Brittain, the insolvency specialist at Deloitte, recommends seeking advice from professionals as soon as one feels they may be in difficulty. Speak to your bank and major creditors to make arrangements for cash flow issues and do this early.
Source: Working Lunch, BBC. (27-01-2010)
Companies Will Go Bust After Recession
Labels: bankruptcy, insolvency, loans, recession
