MORE than 1,500 Swindon businesses found themselves in "significant" financial distress during the first three months of this year. 

This is according to the latest figures from Begbies Traynor’s “Red Flag Alert”, which monitors the financial health of British companies.

There were 1,571 local businesses in this category during the first quarter of 2022, which is three per cent fewer than the figure from the fourth quarter of 2021 and 20 percent less than at the start of last year.

Telecoms and IT and automotive-related companies experienced the biggest quarterly increases, seeing nine and eight percent rises respectively between Q4 2021 and Q1 2022.

Nationally, the latest Red Flag Alert research for Q1 2022 recorded 581,596 businesses in significant distress, which is roughly the same as the previous quarter.

But there was a marked increase in the numbers of businesses deemed to be in ‘critical’ distress, with a 19 per cent year-on-year increase which had been driven by a 51 per cent jump in the construction sector and a 42 per cent rise among bars and restaurants.

There are serious concerns about a steep increase in County Court Judgements (CCJs) as data revealed there were 11,673 rulings in March – up a whopping 179 percent on the monthly average for the previous two years and the highest level in a single month for five years.

Julie Palmer, partner at Begbies Traynor in Swindon, said: “While the year-on-year data of companies in Swindon in significant distress may be encouraging, the critical distress and CCJ numbers highlight troubles building up in the system.

"For the first time in more than decade, inflation is the prime concern for businesses as companies struggle under rising costs.

“However, having ploughed so much money into protecting businesses over the past two years, the government won’t want to see it wasted as companies collapse, unable to repay their debts.

"Taking a hard line on repaying pandemic funding and other loans would likely drive many businesses over the edge, which no-one wants to see as the economy struggles to recover.

“As such, there needs to be a long-term view. For example, we could see support for businesses through leniency in repaying pandemic funding, or an approach like war bonds, with terms being extended.

“However, any businesses facing financial difficulties, for whatever reason, should seek professional advice in order to fully understand the options available.”