High street about to get hit by a wave of closures over unpaid rent?
The last 15 months have been particularly gruesome for retail. Many businesses have accrued substantial debts that they are only just beginning to repay. It’s reported that 30% of retailers have already faced CCJs from their commercial landlords. Could UK high street get hit by a wave of closures over unpaid rent?
Little breathing space
From 30 June, a moratorium preventing commercial evictions will be lifted. As the enforcement action on rent arrears restarts, HMRC and trade creditors will again be able to petition to wind up companies. According to the BRC, two-thirds of retailers likely to be subject to legal measures from July.
Running out of time
Some businesses may have built reserves from COVID business loans and not paying rent or tax. However, it may not be enough to foot the bill when demands start coming through the door. With the financial pressures rising, 80% of commercial tenants reported that they were given less than a year to pay back accrued rent arrears.
Having a recovery plan and a firm grasp of the business cash flow will help with contingency planning and bulletproofing the business. My advice is – talk to your key stakeholders sooner rather than later. Staying too complacent is likely to lead to the business demise.
If you are a business owner and are worried about the finances, don’t put it off. There are still options available. Contact us for a free impartial consultation on 0800 118 2948.
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