Begbies Traynor, have today released their latest Red Flag alert which is a monitor of early warning signs of company distress, and will make for uncomfortable reading among UK business owners.

The report shows that more than 140,000 companies fell into significant and critical financial trouble in the last quarter of 2009; 6% higher than in the previous quarter. The report also warns that businesses are yet to face the most challenging phase of a recession, which is traditionally during the recovery period.

Ric Traynor, Executive Chairman of Begbies Traynor Group, said:

“Government support measures are providing welcome relief to the UK's struggling companies in the short term but they may exacerbate problems for some businesses as the need to repay debt catches up with them later in the year.

“Experience of the last four recessions tells us that unemployment levels and corporate and personal insolvencies have lagged behind technical recession by 1 to 2 years.  With tax and interest rates certain to rise, as well as increasing pressure on consumer spending, there is every reason to suggest that the insolvency peaks of this recession remain some way off.

“While business finance is expected to become more readily available during the first half of 2010, we anticipate a rise in the levels of financial distress during the second half of 2010, as temporary financial support measures are unwound.”

If you are a business owner operating in Northern Ireland and require legal advice on any aspect of your company contact Wilson Nesbitt solicitors in Belfast by calling 0800 840 9295 or by emailing business@wilson-nesbitt.com .

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