Scottish insolvencies rise, but credit pressure yet to reach pre-pandemic levels – comments

“The number of Scottish companies entering insolvency has increased again, according to the AiB’s latest figures, and that upward trend is set to continue.

“Overall insolvencies are up both when compared with year-on-year and pre-Covid levels. What is interesting to see, though, is that creditor pressure has yet to return to pre-pandemic levels – although year-on-year levels of compulsory liquidations have increased, this is still lower than what was typical during 2019-2020.

“The cost-of-living crisis is yet to take its full toll on Scottish businesses, and I expect increased numbers again next quarter. While it is good to see that overall numbers of insolvencies are returning to a ‘healthy’ pre-pandemic level – meaning that some directors are properly dealing with longer term business issues – the rise in compulsory liquidations is a sign that there is more to come.

“Good quality, regularly updated, and stress tested management information is crucial for the long-term survival of any business. Directors should proactively take advice from professional advisors to ensure that creditor pressure does not suddenly become an insurmountable burden.”

Steven Jansch, head of insolvency at Gilson Gray

The full update from AiB is here: https://www.aib.gov.uk/scottish-statutory-debt-solution-statistics-2022-23-q3