Corporate Insolvency Trends – Numbers Increasing Again!
The official statistics that were published on 18 July 2025 show that corporate insolvency numbers in the first six months of 2025 were higher than in the second half of 2024. In June 2025, Creditor Voluntary Liquidation (CVL) accounted for the main body of corporate insolvencies and represented 78% of all insolvencies. A positive within these Corporate Insolvency trends is that the monthly total of CVLs in June 2025 was still lower than the peak we saw at the start of 2024.
While it is, of course, never nice to be the bearer of bad news, the current reality is that corporate insolvency numbers in the UK continue to be on the rise, and this is despite June’s total (2,043) being 8% lower than in May 2025 (2,230).
What is Driving the Increase in CVLs in the Last 6 Months?
The old maxim implies here – ‘explanations exist; they have existed for all time; there is always a well-known solution to every human problem — neat, plausible, and wrong’. The truth, as is so often the case, will be complex, multi-faceted and quite possibly not understood properly until we have the full benefit of hindsight. However, we do already know that many sectors, not least construction, retail and hospitality, are being hit by a combination of rising costs and uncertainty, leading to customers and clients being unwilling to spend or invest. Anecdotally, we can also attest from enquiries received across our offices that companies offering business support services are not having the easiest of times with recruitment, marketing and subscription-based services all seemingly experiencing a decline in new opportunities. These elements are all playing a part in the current corporate insolvency trends we are experiencing.
It is too early to say if the increase in the minimum wage and increases to employer national insurance contributions are a cause for an increase in insolvencies in the first six months of this year, but it is certainly a factor that has been cited by a number of directors in discussions with us regarding the viability of their business. When coupled with rising energy and supply costs, these employee-related costs seem to have contributed to the ‘tipping point’ beyond which some companies cannot survive.
Corporate insolvency Trends – Will the Increase in CVLs Effect my Business?
When taking account of the corporate insolvency trends in the first 6 months of 2025, a question that will lurk in the back of most business leaders’ minds will be the effect on their own business. The question can be posed in a number of forms, but from discussions with company owners, the general impression is that they ask themselves some or all of the following: What if companies who owe me money go bust? What if my main supplier goes bust? And then, what opportunities does this provide? Or could I be next?
The way a business owner perceives the problem may tell you something about their current confidence in their business or may simply say more about their nature, but below each of these questions is addressed in some further detail.
If you have questions like this and would like some professional advice and guidance, make sure you contact the team at BRI Business Recovery and Insolvency, we are here to help.
What if A Company Who Owes Me Money Goes Bust?
With the current insolvency trends, it’s easy to worry about what would happen if a company that owed you money became insolvent. Unless you have a form of security over the sum owed to you, such as debenture (unlikely) or a valid retention of title (more likely but circumstance dependent i.e. not relevant if you provide a service as opposed to a product) then in most cases the sum due to you will be an unsecured claim in an insolvency process and the returns to unsecured creditors are generally very poor. Again, as per the earlier maxim, there is no easy answer here; you can protect yourself by keeping on top of your credit control procedures, do not allow clients to surpass payment terms, be confident when enforcing debt repayment and do not fall into the trap of treating any specific client as a special case who gets beneficial terms due to the amount of business you do with them. These are all simple but effective measures to protect yourself against bad debt. However, there is no silver bullet to fix the problem if it arises.
What if My Main Supplier Goes Bust?
Another completely valid worry when looking at the 2025 insolvency trends. Again, this is a scenario which does not necessarily have a simple guaranteed solution that can be implemented. On the basis that prevention is better than cure, the aim for any business must be, so far as possible, to avoid putting all eggs into one basket and always being mindful of the dependence on one supplier and how you can spread this risk where possible.
It is also the case that a major supplier going through an insolvency event may create opportunities and being proactive and liaising with the director of the insolvent business and appointed office holder may produce conversations which can result in assistance being given to either help a rescue of the underlying business or some other form of outcome which allows a supply to your company to continue. Such a response may well require a certain amount of biting one’s tongue or swallowing one’s pride, if a large amount of debt is being written off in the process, but the future prosperity of one’s own business must remain the ultimate goal.
Are There Any Positives When it Comes to Recent Insolvency Trends? What Opportunities Does an Increase in Insolvencies Provide?
Each individual insolvency needs to be judged on its own merits and although there are some broader reasons for an increase in the numbers of corporate failures, every company that enters a process will have its own story. Some companies are just tied into contracts or leases that have become unprofitable, but the underlying business remains strong. Others may have faced a series of unfortunate events that have culminated in cash flow pressures becoming too great for them to overcome, but they have a solid business beyond those events.
Some business owners will always have an eye for an opportunity, and it is true that the misfortune of one party can sometimes lead to good fortune for another. An insolvency event of someone else in your industry may afford you the opportunity to both review the reasons for their failure and help you identify risks that can be addressed early to save the same problems from being encountered.
In some specific circumstances, as indicated earlier in this article, it could be the case that a supplier entering an insolvency process allows you as their former customer to either purchase their remaining stock, if staff have been made redundant these may represent a valuable resource to you or you could consider that a purchase of the whole underlying business may be in your best interests.
Could I Be Next if Company’s Owing me Money Have Gone Bust?
It is not uncommon for a business owner who approaches BRI for advice to state that their situation is the result of either one or several other parties having not paid them. When these non-paying debtors have already entered insolvency processes, the chances of receiving the money owed become very small indeed. Therefore, the chance of facing cashflow issues if your debtors go bust is very real.
To be forewarned is to be forearmed, and prevention is very much better than a cure in these situations. By having a clear and robust cash collection policy, spreading risk and managing your own resources, incorporating retention of title clauses (which have been prepared by a suitably qualified lawyer) and/or requiring payment in advance, hopefully, the best interests of your own business can be protected. In all circumstances, do not be shy about a desire to put the interests of your business first.
However, if, for whatever reason, you do now find that either your business or that of a client is facing an uncertain future due to potential insolvency, please do not hesitate to contact us for a free, no-obligation and confidential chat to discuss whether we can assist the business. We are here to help, contact our team for more information.