Figures compiled by accountancy firm UHY Hacker Young have revealed the number of winding-up petitions issued against restaurants increased by 165% in the first four-and-a-half months of 2020.
From the start of the year until 20th April 2020, 53 winding up petitions were filed – compared to just 20 over the same period last year.
High street closures due to lockdown measures and social distancing rules has meant a drastic decline in footfall and, subsequently, a huge reduction in cash flow for restaurants across the country.
The government recently announced a temporary ban against the use of winding-up petitions to help our businesses, until 30th June. It is thought that a bigger surge of petitions will occur once the ban is lifted.
Peter Kubik, a partner at UHY Hacker Young, said: “The recent jump in winding-up petitions against restaurants is unlikely to be the biggest increase we see this year. Once lockdown measures are relaxed and the new temporary ban on winding-up orders ends, a lot of restaurants will struggle to stay afloat for long.
“Restaurants will have an extremely small window to get customers back through the door before restart costs deplete cash and send them into insolvency. They are especially at risk being one of the last sectors to return to normal activity.”
Insolvency in the restaurant sector
Even before the devastating impacts of the coronavirus pandemic, the restaurant sector was an industry under pressure. The implementation of the National Living Wage, Brexit and a whole host of other factors have placed many restaurants in trouble.
Clarke Bell has a wealth of experience in helping restaurant owners who are facing problems with their cash flow and business debts.
If you are the owner of one of the thousands of restaurants which are currently struggling, contact us now on 0161 907 4044 for free and confidential advice.
We will help you work out what is the best option for your current situation. This could be closing down your company with a Creditors’ Voluntary Liquidation / CVL and re-starting with a new business. We will also be able to help you raise the funds needed for the re-start.