Debt Recovery News – Experian’s latest Insolvency Index released

The health of the UK’s micro and small business community marginally improved in April, according to Experian, the global information services company and credit reference agency.

Experian’s latest Insolvency Index, published at the end of May, revealed that some 1,800 UK companies, accounting for ‘a tenth of one percent’ of the active business community, became insolvent during April. This figure is just over one half per cent less than the same period in 2010.

Business failures fell at a faster rate across the majority of the smaller business segments year-on-year, with the most notable reductions amongst firms with the three to five employees (down 17%) and those with 26 to 50 employees (down 25%).

Business failures amongst the medium sized firms making up the latest Insolvency Index figures, (i.e. those with 101 – 500 employees) increased by just under 4.5% year-on-year, while large company insolvencies (501+ employees) rose by 9%.

The figures may however be misleading in that they may not necessarily reflect a strengthening small business climate amid a retracting mid sized and corporate playing field as the number of start ups has been steadily increasing in the wake of savage job cuts leading many to set up micro businesses. As a result, the figures may be slightly skewed.

Despite the latest monthly figures, medium and large companies continue to have amongst the lowest overall failure rates, with just 0.18 per cent and 0.13 per cent of firms in these segments failing during April compared to the previous month.

Biggest Winners and Losers

The biggest improvement in business failures rates was recorded in the Midlands and Wales with business failures down 19% and 18% in these regions respectively. In stark contrast the East, South East and North East of England saw failures increase by 26%, 15% and 14% respectively year-on-year.

The UK property sector remains one of the hardest hit by business failures and the Insolvency Index recorded a whopping 70% year-on-year increase in business failures during April sending out shockwaves to the already shattered confidence in this depressed sector of the UK economy.

Max Firth, the Managing Director of Business Information Services at Experian UK & Ireland, said: “With business failure rates and financial strength fluctuating across different regions and sectors, it is especially important that any organisation extending credit to or relying on other businesses for goods and services is able to understand the level of risk associated with their commercial partners.”

CCDR is a leading UK Debt Recovery specialist with international reach and a client base of SME’s and multinational organisations. Our services include:  Debt Recovery, Debt Mediation & Debt Dispute Resolution, Business Reports and Debtor Tracing, Outsourced Credit Control and Corporate Legal Services.


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