Close Menu
UK Liquidators

Insolvency Related News

Latest News from UK Liquidators

Low-Cost Liquidation
100% Confidential
Stop HMRC & Creditor Pressure
Partner-led Service

Manufacturers Facing Financial Crunch and Fight for Survival

By Jon Munnery
2 December 2021

Manufacturing companies are facing a combination of major financial challenges as their sector and the wider economy recover from the worst of the coronavirus crisis.

According to a new report, businesses within the manufacturing sector are faced with an unprecedented “post-Covid credit, cash and costs crunch” as they approach 2022.

That report comes from the trade body Make UK, whose experts are concerned that there could soon be a “tipping point” and a significant increase in insolvencies and liquidations among British manufacturers.

“Industry is facing the perfect storm with a raft of rapidly escalating costs combined with significant levels of debt which many companies took on [during the Covid crisis] as a precautionary measure just to stay afloat,” explained James Brougham, Make UK’s senior economist.

“Given the inflationary spiral shows every sign of continuing to climb, many companies fear a tipping point that could make their business models unviable.”

Research carried out by Make UK and the consultancy firm RSM indicates that close to half of all manufacturers now have more debt than they did prior to the pandemic, with six out of 10 saying they are still planning to borrow further.

Roughly a third of manufacturers say they are concerned that their debt burdens could fundamentally threaten their financial viability within the next two years.

Already, four out of 10 manufacturing companies polled recently said they have or intend to seek support from restructuring, turnaround or insolvency professionals to help improve their circumstances and prospects.

In response to its own findings, Make UK has called for the government to consider offering payment holidays to manufacturers that are struggling to manage their debts.

Mr Brougham from Make UK has conceded that the government can do little to ease cost pressures in general but urged policymakers to think seriously about how they might be able to support businesses at risk of insolvency.

The government could potentially “take a softer approach to helping companies by looking again at the payment periods for their loans or introduce payment holidays,” he said.

“This could provide the vital breathing space which would enable companies to ride out the current storm into calmer waters,” he suggested.

Jonathan Munnery
Insolvency & Restructuring Expert
Is Liquidation the best option for you?

By completing the test, you will receive:

Your Liabilities & Assets
Types of Liquidation Available
Your Companies Health Risk
Alternatives to Consider
Related Articles
29/03/2022
Restaurant Insolvencies Up as Sector Faces ‘Onslaught of Challenges’
The number of restaurant businesses entering insolvency increased notably during the final three months of last year, according to a new set of figures.
Read more
27/01/2022
Voluntary Liquidation Rates Up 37% Year on Year in December
The number of company directors voluntarily taking their businesses into liquidation increased by 37 per cent in December 2021 compared to the same month of the previous year.
Read more
21/01/2022
Spiralling Overheads Leaving Small Businesses ‘On a Knife Edge’
Rising costs and eroded profit margins are leaving thousands of small businesses on a financial knife edge and facing the prospect of potentially entering insolvency.
Read more
Ready to Liquidate?
Express Liquidation Service
Ready to start liquidating today? Complete the form and a member of our team will be in touch.
Please note: By completing this form you are not liquidating your company
Contact the UK Liquidators Team

If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.

  • Free initial consultation
  • Strictly confidential
  • Fully licensed insolvency practitioners
  • Local office support
  • Named case handler throughout
Logo Tma
Logo Business Recovery
Logo Cse
Logo Iip

Looking for immediate support?

Complete the below to get in touch

 
 
 
 
 
100% Free & Confidential Advice

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY