The latest figures from the government’s Insolvency Service show a significant rise in company insolvencies in May 2023 compared with the same month last year.
May 2023 saw 2,552 companies declared insolvent, that’s a 40% rise in company insolvencies. This was mainly through creditor’s voluntary liquidations although there was a significant increase in compulsory liquidations (partly because of an increase in winding-up petitions from HMRC looking to recover funds from companies unable to pay their tax bill).
This level of insolvency is understandable given that businesses have been hit hard by increased costs of energy and many will have higher wage bills too. Financing costs have also increased as interest rates have risen. This has led insolvency experts to predict that Britain’s army of ‘zombie firms’ will be wiped out as cheap borrowing comes to an end.
Clearly, an increase in the level of insolvencies means the chance of a bad debt amongst your own customer base is more likely. Why not gain a health check on your three largest customers? We’ll provide an overview of the credit risk attaching to your 3 biggest customers based on the view of a panel of our insurance partner underwriters. This will deliver valuable insights into credit risk, allowing you to make informed decisions about the level of credit offered to your top customers.
