Lack of available credit may have contributed to a skewed UK insolvency rate, research suggests.
A lack of
commercial lending may be behind the decline in corporate insolvencies.
Levels of insolvencies may appear artificially low because of the restrictions faced by businesses seeking
sources of finance, suggests data from credit reference agency Graydon.
The firm also goes a step further, suggesting that the official number of UK failures will fall farther during the third quarter of 2010, compared to the previous three months.
Graydon UK managing director Martin Williams suggests that this decline has not been immediately evident in part because businesses have been enabled to defer tax payments under the HM Revenue and Customs Time to Pay scheme.
He explained: "HMRC is currently supporting some estimated 80,000 companies that under normal circumstances may well have collapsed.
"Compare this with the 19,000 companies that failed during the whole of 2009 at the very height of the credit crunch, and we begin to see just how bad the rate of company failures could have become."
However, the commercial lending situation could yet improve, with Barclays suggesting earlier this week that it is seeking small businesses to offer sources of finance too.
Posted by Pete White
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