Ten firms per day go bust as liquidations increase 68pc on last year
THE number of companies going bust is continuing to rise with new figures showing 10 companies a day going into liquidation in August.
Vision-net.ie says August was one of the highest months so far this year for businesses closing their doors, leaving unpaid debts, and is up 68pc on the same month last year.
It identifies over a third of the 174 companies that went bust had "unsatisfied mortgages" or bank loans which have not been repaid. Another 31 companies went into receivership. In August, 40 construction companies, 33 retailers, 21 real estate firms and 17 companies in the hospitality industry all closed.
Vision-net.ie managing director Christine Cullen said the surge in liquidations is a clear sign that both companies and lenders are calling it quits in an effort to minimise spiralling losses.
"The proportionally higher rise in insolvencies in the retail and hospitality sector is likely to be a reflection of the weak consumer sentiment and the lack of disposable income," she said.
The fall-out for banks from insolvencies is also becoming apparent, Ms Cullen said. "We identified that over one-third of the companies declared insolvent in August left unpaid bank loans and the liquidator determines what portion the banks will get."
She estimates there were 10 staff on average in every company that closed this month. Many of the directors of these firms are not eligible for state financial assistance because they are regarded as having been self-employed.
"As for the debate on debt forgiveness, these figures suggest the number of people who have limited or reduced income regrettably looks like it is set to rise," she said.