Banking & Saving - R3 warns of dangerous times for businesses

Now could be "the most dangerous time for businesses", it has been suggested.

Although the recession may technically be over, significant number of businesses will continue to experience financial difficulties as the year progresses.

Such is the assertion of insolvency trade body R3, which reports that some 28,000 corporate insolvencies are expected in 2010.

Not only does this represent a slight increase from figures recorded in 2009, it is also a 22.8 per cent rise from the 22,792 seen in 2008.

And now could be an ideal time for firms to assess their business account use, as president Peter Sargent points out that a period of economic recovery "is the most dangerous time for businesses as creditors attempt to collect money owed and policy makers cut measures aimed at helping those in financial trouble".

Those looking to make repayments on business credit cards may also want to consider his claims that the Bank of England's recent interest rate hold suggests that there is a danger of "a double-dip recession".

Such sentiment was echoed by Forum of Private Business spokesperson Phil McCabe who claimed that despite recent signs of improvement, "the worst certainly isn't over" and businesses should look to keep a firm grip on costs.

By Joe Letts