A cold snap like that of last winter would force one in eight businesses in the North to go to the bank cap in hand, while one in 25 could go bust, according to research by the insolvency trade body R3.
The survey showed that four out of five northern businesses (80 per cent) would be adversely affected in some way by a bout of severe weather. Over half (58 per cent) said staff would be unable to get to work and half (51 per cent) would suffer reduced profits.
One in eight (13 per cent) said they would have to ask to extend their overdraft or need access to additional finance, while one in 25 (four per cent) said they feared it could tip them into insolvency.
Jeremy Oddie, North West regional chair of R3, said: “A few days of icy weather this year could easily result in financial disaster, especially for those businesses which are already struggling. Last year the weather caught us all off guard – this year we’d advise businesses to plan for the worst to avoid taking a real hit if trading suffers.”
Through the country as a whole, retail and distribution businesses were most concerned about the effect of a cold spell. Jeremy Oddie added: “It’s no surprise that retailers are worried. R3’s Business Distress Index has shown that distress levels amongst retailers are the highest of any sector, with 58 per cent reporting a drop in profits this year.
“Although the last retail figures showed sales were up, people are likely to curb their spending again after Christmas. A cold spell, coming on top of the quarter day at the end of December when rent is due, could put many out of business. Any company that is struggling should seek the advice of a professional to ensure it has the best chance of survival.”