ZOMBIE businesses are on the increase in Yorkshire, says a report.
Research by insolvency trade body R3 said there were now 16,000 “zombie” businesses in Yorkshire – a figure representing 9% of all businesses in the region.
Zombie businesses are ones that are only able to pay the interest on their debt, but not the debt itself.
R3 said there were now 160,000 zombie businesses in the UK. That’s 10% up on the figure of 146,000 in July and represents 9% of all UK businesses.
Chris Wood, Yorkshire R3 committee member and a partner at Clough Corporate Solutions in Cleckheaton, said: “The phrase ‘zombie business’ has been bandied around quite freely and looking at companies that can only service the interest they owe, but not the debt itself, is a practical definition of this term.
“I would add that the phrase also extends to those companies who are currently over-geared and cannot pay back the debt in full.”