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Many thousands of SMEs across the UK are operating on a financial footing that puts them perilously close to liquidation.
In fact, research conducted recently by the digital marketing and online directory business Yell suggests that almost a million SMEs have less than £1,000 available to them as savings.
Those figures indicate that roughly one in six small and medium-sized enterprises across the country are treading an extremely narrow path when it comes to managing their money and remaining solvent.
For company directors, having very little financial flexibility can be enormously stressful and they’re well advised to get expert help if they think entering voluntary liquidation could soon become a necessary or viable option.
SMEs across industries have been battered in recent years by the impacts of the Covid pandemic and by exceptionally high levels of inflation.
Almost half (45 per cent) of small business bosses say they find it more difficult to save money now than they did three years ago, prior to the pandemic.
The latest official data from the Insolvency Service shows that an increasing number of company directors are running out of road financially and entering their businesses voluntarily into liquidation.
Creditors’ Voluntary Liquidation (CVL) cases were higher in England and Wales during the early weeks of 2023 than they were in the comparable periods of the previous four years.
Yell’s recent research found that one in 10 SME bosses are currently not confident that their business will have enough money to survive beyond the next six months.
Reflecting on the latest official liquidation and CVL data, Nicky Fisher, the vice president of the insolvency and restructuring trade body R3, said: “Now is the time for directors to be aware of the signs their businesses are struggling and to seek advice if they show themselves.
“Cashflow issues, payment delays and rising stock are all signs a business is distressed and the earlier directors seek advice, the more options they have open to address the issues they face.”
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.
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