Small Business Insolvent Deals Have Doubled In A Year

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Acquisitions of insolvent businesses in the UK have more than doubled over the past year as more and more people find themselves unable to cope with their finances.

According to insolvency trade body R3, more firms are on the lookout for struggling businesses as a means of getting a cheap deal or snapping up the competition. It says that during the last three months of 2009, 67 out of the 630 deals completed in the UK – one in nine of all deals – involved companies acquired out of administration or other formal insolvency procedures.

During the year as a whole, there were 345 acquisitions of distressed businesses, amounting to one in every eight mergers and acquisitions. This compares to 2008 when there were 159 distressed acquisitions, accounting for one in 27 mergers and acquisitions.

Peter Sargent, president of R3 says: "Acquisitions of insolvent businesses have risen significantly and remain high. While pre-pack administrations may account for some of these deals, others will be acquisitions by canny buyers taking the opportunity to pick up bargains while values are low."

The last thing a small business person wants to see is their enterprise picked up for a song and then ripped apart by the competition. They worked hard to build up their business – probably investing all their money and more time that they'd care to mention – only to see it fail because they couldn't keep up with their debts.

Don't allow your business to die. Make sure that your finances are as good as they can be with the help of a professional small business financial adviser. They can help you take out new loans and manage new lines of credit so as your business can survive.

SOURCE: R3, 28/01/10

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