Insolvencies within the Motor Trader Businesses in the UK Continue To Plummet
Insolvency is a term that can be associated with an individual or with a business. However, it is more often than not, associated with the running of a company or business. Businesses are known to be insolvent, if they are unable to pay their debts when their debts are due, which results in past-due balances, and other financial issues.
When a UK business becomes insolvent, it becomes an offense of the directors of the organisation to maintain their normal operations. The reason why it becomes an offense is because the organisation will continue to secure additional debts, on top of the ones they presently own. Naturally, common sense would tell you that they will not be able to pay those either as debt is a vicious circle.
There is some good news for the motor trade businesses within the UK though. At the moment, the rate of insolvency that was once experienced by nearly every motor trade business in the United Kingdom has continued to decrease, and this year it is at a much lower figure, showing how stable the industry has become, and continues to get.
According to new figures that were released by Experian, the rates of insolvency that businesses within the United Kingdom experienced during the month of May have dropped by a considerable amount, in comparison to what they once were in 2012. During May of 2013, the rate of insolvency dropped to .10% in 2012, whereby the rate of insolvency within May was .13%.
The overall insolvency rate that was experienced in the UK during May of 2013 was .08%. In May of 2012, the overall rate was .09%. The North-eastern part of the UK fared the best as far as insolvency was concerned. During this month of May, the North-eastern part of the UK had an insolvency rate of 0.11 per cent. In May of the previous year, that amount was 0.14 per cent.
The eastern section of the UK also did fairly well. The insolvency rate in the eastern section of the UK went down from 0.10 per cent during the month of May last year, from 0.08 per cent in 2013. There is only one reason that has experienced a minor increase in insolvencies, and that was the South-eastern region.
The minor increase that was experienced within this region is from 0.07 per cent to an insolvency rate of 0.08 per cent. The North-eastern region, however, had the highest rate of insolvency, being a 0.14 per cent insolvency rate, in comparison to other regions throughout the UK. However, comparing the amounts from last May, there were four separate regions that showed an increase in their insolvency rate.
The managing director of Experian Business Information, Max Firth, stated that there is a big difference that one year can make when it comes to insolvencies within May. The figures have shown that there have been a significant amount of improvements in the insolvency rates throughout the United Kingdom.
One thing that Max Firth did want to make clear is the amount of insolvencies that smaller businesses are experiencing. According to Forth, he states what is extremely pleasing is the fact that insolvencies amongst smaller businesses, which continue to be the backbone of the United Kingdom economy, are continuing to make long-term changes for the better.
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