Rise in insolvencies predicted for 2011

Insolvency firm Begbies Traynor published results of research today.

Insolvency specialists Begbies Traynor today published research suggesting the first year-on-year rise in the number of firms facing serious financial difficulties since the start of 2009.

According to the research 147,836 companies faced serious financial problems in the last quarter of 2010.

Particularly affected industries were business, IT, construction and services.

The research demonstrates the industries most reliant on government funding are already being affected.

This is likely to worsen as cut begin to take affect, with the firm predicting a rise in insolvencies of 10 percent in 2011.

Evidence published by the firm also suggests that creditors are hardening in their attitude to struggling firms.

Particular challenges are being faced by smaller businesses.

Executive chairman of Begbies Traynor Ric Traynor stated that for this group: "we are entering the darkest hour before the dawn as they face the dual challenges of weak domestic demand and greater pressures from larger competitors and business customers looking to preserve their own profitability."