Fewer businesses went into insolvency in the first quarter of 2010 than last year, but a record number of individuals were declared insolvent. In total there were 35,682 individual insolvencies in England and Wales in the first quarter of 2010 - up 17.9 per cent on the same period of 2009. Bankruptcies were down 10.7 per cent, …
I thought individuals with too much debt can simply declare insolvent, so the figures on individuals declared bankrupt has no real bearing on the perceived state of small businesses in the UK.
And how many small businesses are being wound up by HMRC chasing unpaid PAYE and NI?
A more interesting figure...
...would be the number of those personal insolvencies that were, in fact, business related.
With banks and financial institutions continuing to be unwilling to offer finance to small and medium enterprises, but often being prepared to extend additional borrowing to the owners, directors or shareholders of such businesses, what we may be seeing here is the result of private companies, sole traders and partnerships having to wind up voluntarily without being insolvent in respect of their external creditors, but leaving the directors or owners incapable of servicing personal debt that has built up while supporting their business over the last two or three years of difficult trading conditions. If that is the case, then those personal insolvencies do, essentially, reflect business closures and insolvencies too.
Of course, there's probably no way to get those numbers - they would too readily put the lie to all the optimisic fantasies that are being touted by politicians and city analyst types who are trying to convince us that the worst is over and the recovery is beginning. Where exactly they're getting that particular line of horse doings from I don't know, but I do know that most of the SME business people that I have spoken to over the last six months have said that economic conditions have been worse rather than better and they don't see any great improvement on the horizon in the short term.
Of course, that's just anecdotal evidence - but the general gist of the anecdote is exactly the same in every line of business that I have had any contact with. Keep those hatches battened down, I reckon - the rough water isn't over just yet.
I'd just like to say that the construction industry is getting better, however construction was the first into the recession. Another year should just about do it for most other areas.
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