MORE than 450 Yorkshire companies are on the critical list – over four times the number in dire financial difficulties a year ago.
A survey by insolvency firm Begbies Traynor found the credit crunch was continuing to take its toll.
The 450 firms in dire straits in Yorkshire and the north-east compares with just 77 during the third quarter of last year.
Companies with critical problems are defined as those facing winding up petitions or county court judgements totalling £5,000.
The number of businesses in Yorkshire and the north-east in a critical condition rose by 11.4% during the third quarter of the year compared with the previous three months – the third highest increase among seven UK regions.
Nationally, more than 4,500 firms are experiencing critical problems against 791 a year ago.
Nationally the number of companies with ‘significant’ problems has nearly doubled from January to the end of September, to 58,564 nationally.
Those with significant problems are ones facing a court action and/or average, poor, very poor or insolvent or outdated accounts.
Peter Sargent, partner for Begbies Traynor covering Huddersfield and Halifax, said: “Unprecedented market volatility as well as the second year effects of the credit crunch have clearly hit Yorkshire businesses.
“Twice as many are now experiencing ‘significant’ problems and we expect to see an even bigger increase in ‘critical’ business problems over the next year.”
Mr Sargent, of Meltham, said: “Businesses in West Yorkshire – just like the rest of the country – are seeing much tighter credit terms and they are needing a stronger case to convince bankers to support them.
“All businesses need to protect themselves from the downturn by managing their exposure to debtor risk, investing in strategies to ensure customer retention and controlling costs and protecting cash flows.
“ All too often we find that businesses don’t act on these basic principles early enough. Cash is increasingly vital to the survival of a business and it needs to be a top priority.”
