Helping Small Businesses – Mark Phillips KC

Recent figures confirmed that the number of insolvencies, primarily amongst small and medium sized firms has jumped by 30% in 2022.  That is in part due to the end of the covid moratoria but also due to the damage done to so many businesses through the covid period, particularly in the retail and leisure sectors.  Furlough payments have long since stopped.  Landlords are able to enforce their claims.  CBILs loans that were free are now charging interest and as interest rates spike they are exacerbating an existing problem.  Despite the Bank of England’s recent statement that the recession will be shallow, the reality for small business and for the high street is brutal.

A problem, that all insolvency professionals are familiar with, is that directors are not seeking advice early enough or at all.  For small firms most won’t know that advice is available and many will assume they can’t afford it.  To tackle these problems, as we emerged from covid R3 launched the Back to Business initiative.  The website gives directors access to informative resources.  Critically, there is also a search engine that will identify suitable insolvency practitioners who will give them a first free consultation.  This idea came from a comment by a small practitioner during the preparation of the administration consent protocol: “give me the relevant director and the relevant books for 2 hours and I can tell them what their options are.”  The profession has stepped up and is now helping small and medium sized businesses.  Over 250,000 businesses have accessed the resources.  INSOL learned of the initiative and picked it up, inviting practitioners around the world to offer a first free consultation to small businesses.  There are now over 160,000 practitioners signed up around the world and the initiative is in 52 countries.

The gap between available advice and the rising insolvency numbers is a stark reminder that those directors who need to hear this message, the small one shop business on the high street, or the medium sized family firm, still aren’t getting it.  We can hope that as a profession we work together to get the message out.  Otherwise, the recession might be shallow for big quoted companies, but for small businesses it is likely to be so deep that it is terminal.


Written by Mark Phillips KC.

News you may be interested in
South Square & RISA BVI Conference – 2024
South Square & RISA Cayman Conference – 2024
South Square Digest
South Square Digest is our quarterly review of news, cases, judgments and articles covering all our practice areas.
Contact us
Scroll To Top