Insolvency practitioners in Plymouth face wave of companies going bust in 2023
Featured on Plymouth Heald. Written by William Telford Business Editor. Lisa Thomas of business recovery specialist Parker Andrews says Covid loan repayments are a crucial factor in firms going insolvent.
A leading insolvency expert is predicting Plymouth will see a wave of companies going bust in 2023 as they struggle to pay back Covid loans. Lisa Thomas, of business recovery specialist Parker Andrews, said rising energy bills and the flat UK economy are factors too, but said she is talking to companies each week that are unable to pay off Bounce Back Loans (BBL).
Mrs Thomas, who has recently moved to Parker Andrews from another Plymouth insolvency practitioner, said:
“There will be an insolvency boom. We are preparing for a busy year. We are expecting it to be our busiest in a long time.”
She said that, sadly, a lot of companies will go into liquidation, with some sectors affected more badly than others. She said: “It’s inevitable. There will be a mix, but particularly in construction, hospitality and retail. We can already see that retail is taking a hammering.
“Some firms are saying they are just about keeping on top of things, but with energy prices changing in March they can see it is not viable and are taking steps now.” She said BBLs were a key factor in firms going under. The BBL scheme allowed small firms to borrow up to £50,000 at low interest rates, guaranteed by the Government.
During liquidation such loans are written off. The Office for Budget Responsibility estimates £19.7bn of BBL debt will be written off across the UK.
“A lot of them borrowed £50,000 and now have to find that extra profit to pay back,” said Mrs Thomas. “And then there are all the things on top, such as the economy and energy prices. I speak to at least one company a week where the crux is a BBL. In many companies it is the only debt that company has. But it is a huge liability.”
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