UK corporate insolvencies approaching crisis point
News at 4001 companies went bust in the UK in the third quarter of 2008 are starting to cause real concern among financial experts. The main worry is the fact that this type of news will see banks and other investment groups pull in their horns and demand greater guarantees and covenants for future financial assistance.
In many ways this is turning out to be a self fulfilling prophecy because as the situation worsens, banks will become more concerned about a company's ability to repay loans and may place further pressure on existing customers as well as cutting back on new arrangements. Many quality outfits are struggling with immediate liquidity and even though their businesses may be a robust the short term future for many is uncertain.
While the mortgage industry continues to grab the headlines behind-the-scenes it is corporate UK which is being hit as hard as anybody. Despite concerns expressed by the various business confederations very little is being done to ensure these companies are accommodated in these very difficult times. Some experts are concerned that by the time the government act it will be too late for thousands more UK businesses which could and should have been saved.
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