Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Warning that thousands of firms face collapse

Warning that thousands of firms face collapse

There are growing fears that 2023 could see a wave of company collapses as the cost of living crisis continues.

The number of firms on the brink of going bust jumped by more than a third at the end of last year, said insolvency firm Begbies Traynor.

It expects this number to rise due to higher costs and consumers cutting back their spending.

Paul Jones, co-founder of brewery Cloudwater Brew, said the pressure felt like a "never-ending nightmare".

Julie Palmer, partner at Begbies Traynor, said it was receiving an increasing number of calls from businesses owners like Mr Jones who were concerned over whether they could carry on.


'Survival mode'
Paul Jones says he feels like continuing his business is either not possible or not worth it


Mr Jones said his Manchester-based company has been in survival mode since March 2020, with high costs, debt, low consumer confidence and post-Brexit trading problems all bearing down on the business.

"The cost to me has been pretty bleak," he said. "I have a heart condition from stress and I feel constantly on the edge of what I can personally cope with."

His thoughts have turned to closing his business "probably once a month since 2020," he said.

"I feel like continuing is either not possible or not worth it," he said. "We're going to keep going. What else can we do?"

But he remains downbeat about business prospects in 2023.


Financial distress


Begbies Traynor said the number of companies in critical financial distress jumped by 36% in the last three months of 2022.

A firm is in critical financial distress if it has more than £5,000 in country court judgments or a winding up petition against it.

The number of county court judgments served against companies in the same period jumped by 52% compared with 2021.

Ms Palmer said that up until now low interest rates and loans had helped firms. In the pandemic, Covid loans and a longer time to pay taxes had meant that support had continued.

"[The support] all seems to be coming to an end at the same time, with nothing really on the horizon in terms of what might replace them," she said.

A backlog in the insolvency courts due to Covid has also delayed some company collapses.

"The courts were closed for business so nobody could take recovery action against non-payers and we are beginning to see those cases pushed through now," she said.

Chef Mary-Ellen McTague had to close her restaurant last year


This cocktail of challenges has already proved lethal for some.

Chef Mary-Ellen McTague set up a restaurant The Creameries in Manchester back in 2018. It received rave reviews and was trading well until the pandemic hit the following year, and the business never fully recovered.

High energy costs were the final straw. She had to close the restaurant in September last year.

"It became apparent that no matter how hard I worked, how hard I tried, how many different tactics we tried to turn it around, we were just never going to get enough customers through the door to make it work. And that was a horrible moment," said Ms McTague.

She said running a business during such a difficult period took a huge emotional toll.

"I think it can be a really lonely experience being in that position," she said.

"If you are the head of a small business, you've got close relationships with your staff, your suppliers. And you don't want to worry anyone, so you don't necessarily talk to your friends, family, or even your partner about it," she added.

"You don't want to worry your children. There's a lot of trying to keep the worry from others, which means you hold it in yourself.

"There's still quite a lot of stigma around it, and feeling this sense of shame of things not working out, even when it's completely out of your hands."

She admitted that she had mixed feelings when she finally had to close the business

"Once you're at the point where you can see what's going on and you can't make it better, there is definitely a sense of relief afterwards."


'Little investment'


NatWest boss Alison Rose said that while the UK's biggest business lender is yet to see widespread company failures she is concerned that firms are unable or not confident enough to invest for the future.

"We are seeing very little investment thanks to very low business confidence. That for me is a real concern because it will affect future growth."

But there were still reasons for optimism in 2023, she said.

"If you think we have had a global pandemic, the end of low interest rates, a war in Europe, massive price rises - what we have seen is incredible resilience in UK business," she said.

"We are also at full employment which is really positive. We are seeing record number of start-ups and banks like ours that is in a strong position to support customers. So it is a tough environment, but we should never forget how resilient business owners have been."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×