East Midlands continues to see a drop in start-ups

A report from the Midlands branch of national insolvency and restructuring trade body R3 reveals a continued drop in the number of new businesses set up in the East Midlands, with many local entrepreneurs holding back due to political uncertainty.

Based on data from business intelligence provider Creditsafe, R3’s figures show there were 2,141 new businesses in the East Midlands in June, a 40.51% decrease compared to the 3,599 new businesses registered in April, before the announcement of the General Election. May’s figure was similarly low, with only 2,076 start-ups.

In June, there were also 23,736 East Midlands companies with late payments on their books and a growing number of debts owed by liquidated firms in the region.

The statistics are set against a volatile economic backdrop as the local economy waits for the new government to stabilize.

R3 Midlands chair Stephen Rome and a partner at local law firm Penningtons Manches Cooper, said: “It’s apparent that entrepreneurs have, understandably, taken a cautious approach over the last couple of months, waiting to see how they may be supported or held back by a change in government.

“Going forward, it’s vital for start-ups to have a reliable economic platform to launch their undertakings, particularly as they are still having to navigate the longer-term economic challenges of inflation and spiralling fuel, energy and wage costs. Helping to achieve this has to be a political priority for our new politicians, lawmakers and opinion formers.

“In the meantime, should significant cash flow difficulties arise for new entrepreneurs or established business owners alike, it’s crucial to take professional advice as soon as possible. There is a significant amount which can be done to rescue and support local businesses if help is taken early enough.”