South East England has the highest percentage of businesses considered to be at a ‘high risk’ of insolvency, according to the latest study by insolvency trade body R3.
The research comes at a time when small and medium-sized enterprises (SMEs) are grappling with an increasing number of challenges, ranging from high business rates and late payments through to the uncertainties surrounding Brexit.
The research found that while South East England was an ‘insolvency risk hotspot’, regions such as Scotland and Northern Ireland have actually seen a decrease in the number of firms facing an elevated risk of insolvency in recent months.
According to R3, almost half (47 per cent) of businesses in the South East are currently facing a ‘greater than usual’ risk of insolvency.
Separate research published by the Insolvency Service in November indicates that the number of total company insolvencies in the UK has increased by a shocking 19.3 per cent in recent months.
A spokesperson for R3 said that uncertainty surrounding Brexit was having a knock-on effect on both business and consumer confidence.
They added that this was affecting a number of key business sectors – ranging from “retail and hospitality” to the restaurant sector.
Commentators have warned that businesses across the UK are likely to be expecting things to improve over the Christmas period due to the “festive rush.”
However, R3 and other insolvency organisations have said that businesses must proceed with caution and seek urgent advice if they are facing financial difficulties.