OVER 100,000 UK businesses were owed money by suppliers or customers entering an insolvency procedure in 2015, research by insolvency trade body R3 shows. Some 113,000 companies - or 6% of all UK businesses - were creditors in an insolvency procedure over the last year. Medium-sized businesses - those employing 51-250 staff - were most likely to have been exposed to another firm or individual's insolvency, with one-in-seven (14%) of these businesses owed money by an insolvent individual or company. Phillip Sykes, R3 president said: "Growing businesses encounter two classic problems: going for growth by taking on new customers without properly checking their creditworthiness; and a lack of controls to monitor their exposure." "This leaves growing businesses, particularly medium-sized ones, as the most at risk of being exposed to others' insolvencies." "Although the UK insolvency regime is ranked as one of the best in the world, it is often the case that those owed money in insolvencies won't see all of their money back. This can have a serious impact on their own finances." "Businesses need to take preventative measures and properly asses risks before trading with individuals or other firms. Doing so will minimise the chance of being exposed to others' insolvencies in the first place." The research, from R3's Business Distress Index, a long-running survey of the financial health of 500 UK businesses, also found that only 4% of large businesses (250+ employees) have been a creditor in the last year. By comparison, between 5-7% of businesses employing between one and 50 people were a creditor in an insolvency process last year. The research also showed that 4% of businesses employing between two and five people were a creditor in over five insolvencies last year (23,000 businesses) - the highest proportion of any business size in this situation. On average, all businesses should be a creditor in one insolvency procedure every five years.
Over 100,000 UK businesses were owed money from insolvent companies in 2015, according to a new report from trade body R3, which found medium-sized businesses were more likely to be exposed; 4%14% of medium-sized firms were owed money by an insolvent company last year. The research also revealed that 14% of businesses employing between two and five people were creditors in over five insolvencies last year (23,000 businesses), the highest proportion of any business size in this situation. On average, all businesses should be a creditor in one insolvency procedure every five years. As we previously noted, the rate at which UK property companies entered insolvency reached its highest point in six years in 2015, due to rising property values prompting lenders to put "zombie" companies out of their misery and reclaim their assets.