New data from the Office for National Statistics (ONS) has shown the extent of business insolvencies in 2024, with December’s monthly figures taking the year’s total to a worrying 25,159. This is a 14% jump from the previous year when 22,129 folded, which at the time was reported to be the worst year for insolvencies since 2009.
While inflationary pressures were – and remain – challenging for UK businesses, and with many firms still contending with the pay-back of Covid recovery schemes, it’s perhaps unsurprising that we are seeing such high insolvency figures. That said, we believe many of these closures could have been avoided in 2023. With the right financial planning and specialist support in place, recovering vital cashflow and finding the stability to endure unexpected knockbacks is much more manageable.
When we think about the common issues that lead to business failures, many can be overcome with the right financial support in place. Firstly poor cashflow management, often made worse by invoice late payment, creates a huge knock-on effect with businesses struggling to meet their overheads. Introducing Invoice Finance solutions can significantly overcome these issues for businesses. Sound financial planning is also vital, and a part of this involves looking at the assets within a business that have potential value to release as working capital via Asset Re-Financing or Asset Based Lending.
And finally, we need to consider the level of awareness of the options available to businesses. When exploring financial solutions, often businesses will head straight to the big banks, but in recent years we’ve seen these traditional lenders become much more risk averse. When businesses are knocking on a closed door, many will assume that their options are exhausted, but working with a smaller lender, who can adapt to the changing landscape and offer more agile services, means that businesses have more (and better) options.
We’ve made extensive investments in the growth of our teams here at Time Finance to build a service that now works with more than 11,000 businesses UK-wide, helping them to recoup money owed in unpaid invoices, or invest in assets they need to equip themselves for the future. Over the past few years, we have adapted our offering and service level to increase the variety and availability of support for business owners. In our Asset Finance division, we now have a ‘Fast Track’ option available for both new and established firms to acquire the equipment they need. Ultimately, we are working to turn the tide for businesses, to ensure that we prevent needless insolvencies of those that have a promising future.
*ONS, Monthly Insolvency Statistics December 2023, 16th January 2024
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Ed Rimmer is the CEO of alternative lender Time Finance