Credit Insurance: UK Companies in Numbers

• Stephen Uwins
• 24th February 2017

We recently received Creditsafe's "2016 A Year in Review" analysis and we found all the information very interesting. We therefore thought it would be useful to pass on some of their findings.



Company start-ups




• 2016 had 605,570 newly incorporated companies, which was down 1% on the previous year

• 2015 had 610,589 newly incorporated companies, which was up 4% on the previous year

• 2014 had 610,589 newly incorporated companies, which was up 11% on the previous year




Whilst the growth stopped last year, 2016 did have growth during Q2 compared to 2014 and 2015.



Company start-ups by Region

                                                                                            

Start-Ups	2016	2015	2014
East Anglia	73,764	69,847	67,242
East Midlands	19,831	21,415	20,588
Greater London	188,320	191,515	183,716
Northern Ireland	6,826	7,317	6,531
North East	11,197	11,711	11,720
North West	65,603	62,308	58,122
Scotland	32,352	34,787	32,002
South East	59,511	66,467	66,057
South West	41,405	37,210	35,878
Wales	14,697	15,347	15,893
West Midlands	52,846	49,396	48,599
Yorkshire	38,129	41,998	39,389
Other	1,089	1,271	1,202
Total	605,570	610,589	586,939



 



As you can see, most of the regions show a decrease in the number of start-ups, with London and the South East taking a fairly big hit.



Company failures



Another concern for 2016 is that the number of company failures has grown for the first time in 3 years. Previously company failures were steadily decreasing year on year but then we saw a big drop of 24% between 2014 and 2015. Since this decrease the failures have grown in 2016 with Q4 being the worst period of company failures since Q2 2014.





Following this large increase of company closures in 2016, Creditsafe found that the companies that pose the largest threat of a bad debt are between 3 and 10 years old. This bracket has now had the most insolvencies for the last 4 consecutive years. They also found that 3,866 more start-ups had to close their doors compared to the previous year. 



The importance of Information



All this sort of information is used by credit insurers and credit reporting companies to establish the creditworthiness of businesses that any company or person could deal with. The information they obtain from all sorts of data sources can help with your decisions of who to trade with and whether you want to take on the risk.



If you would like to reduce the risk, credit insurance is a fantastic way to go as the credit insurers analyse all of this information and more. Their knowledge and insight can be a great tool in whether you decide to offer credit terms and if they are seen as creditworthy, you know you will be covered if anything untoward happens. For example one of your long standing clients that has been trading for 9 years and has difficulties, which we now know is likely as companies that are 3-10 years old the most likely to close, the credit insurance covers the risk of losing all the money that the customer owes for your goods or services.



Please get in touch with us if you would like further benefits of trade credit insurance or would like a no obligation quick quote.



Did you know?




• There were 605,570 start-ups in 2016

• There were 23,571 company closures in 2016

• There was over £920million worth of bad debt

• There were 6,319 disqualified directors