search.noResults

search.searching

dataCollection.invalidEmail
note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
In Focus Commercial Credit


When, not if


A rise in corporate insolvencies is only a matter of timing, according to research


Duncan Swift Past president, R3


An overwhelming majority (93.7%) of respondents to a survey of our members expect corporate insolvency numbers to increase over the next year. More than half (56.1%) of the respondents


to R3’s member survey who work in corporate insolvency said they expected corporate insolvency numbers to be significantly higher than in 2019, while 37.6% think they will be somewhat higher. And out of those who said they expect


numbers to rise, nearly six out of 10 (56%) think the increase will happen in October- December 2020, while more than a quarter (26.3%) expect it to occur in January- March next year. Just 16% think corporate insolvency numbers will increase in July- September 2020. Despite the predicted rise in corporate


insolvencies, less than half (42.9%) of survey respondents said they were busier than normal, 15.3% said their workload was unchanged, and 41.3% said their workload was lighter than usual. Asked about demand for corporate


insolvency procedures over the past month (April 2020), those who said demand had increased (38.1%) were outnumbered by those who reported that it had decreased (45.5%).


Corporate insolvencies decrease Despite the lockdown, the economic turmoil and the fall in GDP of more than 20% in April, corporate insolvencies in April and May actually decreased in comparison to the previous months, according to the government’s figures. This is in no small part due to the


government’s support measures, which have helped a number of businesses that


14


would otherwise have struggled as a result of the pandemic. Our members also told us that during


April and May, the enquiries they received were mainly around advice on companies’ eligibility for the state-provided relief packages, rather than formal insolvency support. However, it is clear from the results of


this survey that it is a question of when, not if, corporate insolvency numbers increase, as the support available to businesses has deferred rather than deterred the rise in corporate insolvencies you would expect to see in an economic climate like this. We would urge anyone who is concerned


about the future of their business to seek advice as early as possible. Doing so will give them more options about their next step and allow them to make a more considered decision about how they move forward. Respondents felt the main triggers for


corporate insolvency advice over the next 12 months would be rent payments or arrears (61.7%), trade debts (49.7%), tax payments or arrears (48.1%), and wage payments (35.5%).


Drinking, dining, tourism predicted to suffer most Participants were also asked which three sectors of the economy would be most affected by the COVID 19 pandemic. Nearly four in five (79.8%) said pubs and bars; a very similar proportion (78.7%) said restaurants; and 63.9% said tourism operators. Hotels (40.4%) and retailers (31.1%)


were also identified as likely to be affected.


www.CCRMagazine.com


Lots of people are undoubtedly very keen to get back to social venues such as pubs and bars, to go on holiday, and to enjoy a meal out after a day’s shopping – but the necessary public health measures that these businesses will have to put in place for this to happen safely will put their potential profitability in doubt when they reopen


It is not surprising that the sectors of the


economy that our members expect to be hardest hit are those where physical interaction with customers is a critical part of day-to-day business. For many retail, hospitality and leisure


sector companies, margins were already razor-thin before the pandemic, and relied on operations running at or near capacity. Lots of people are undoubtedly very keen


to get back to social venues such as pubs and bars, to go on holiday, and to enjoy a meal out after a day’s shopping – but the necessary public health measures that these businesses will have to put in place for this to happen safely will put their potential profitability in doubt when they reopen.


CVLs and administrations predicted to be most used processes Asked which insolvency and restructuring tool they thought they would be most likely to recommend over the next month, 26.5%


August 2020


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52