Sharp rise in number of Lincolnshire firms facing financial distress

The number of firms in Lincolnshire facing financial problems jumped by almost 20% in the three months to the end of last year, according to the latest Red Flag Alert data from leading independent business rescue and recovery specialist Begbies Traynor.
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The report found that in Q4 of 2023 distress had risen by 18.5% in Lincolnshire since the previous quarter, to affect 1,675 businesses in the county. Year on year the number of distressed firms in Lincolnshire had grown by 7.3%.

The county had suffered a more severe increase than the UK as a whole, which recorded a 13.9% climb in distress since Q3 2023 and a 5.4% year-on-year increase.

Gareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby, said: “Unfortunately, this sharp rise in distress is a symptom of the fact that businesses that had taken on debt when interest rates were low, and were supported through the pandemic by the Government, are now having to deal with the current reality of high interest rates.

Gareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and GrimsbyGareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby
Gareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby

“Combined with high inflation, which is triggering rising wages and material costs, and weak consumer confidence, unfortunately many of these businesses may be heading towards insolvency and should seek professional advice, if they can, to avoid the worst happening before it is too late.”

Lincolnshire’s construction industry recorded the region’s highest number of distressed firms at the end of last year according to the Red Flag Alert data, at 333 and up by 19.8% since the previous quarter. Distressed real estate and property services firms numbered 181, an increase of 41.4% on Q3 2023, while professional services saw a 8.9% rise in distress, affecting 147 businesses.