Quarterly rent bills 'could spell the end for struggling firms'
North East firms battling to stay afloat in the face of the economic downturn could soon be facing an unwanted Christmas present - a quarterly rental demand that could put them out of business.
A regional insolvency expert is now advising all local companies who think they might be facing any financial troubles during or soon after the festive period to seek help before Christmas, instead of risking not being able to carry on trading in the new year through just waiting to see how things turn out.
Jim James, North East regional chairman of insolvency trade body R3, made the call in advance of the quarter date on which commercial rents are paid, which normally falls at the end of December.
Jim James said: “The period around the turn of the year is already regularly a peak for business insolvencies, as companies battle through to Christmas and then fail in the early months of the new year, where trade can often take time to get back to normal levels, but these problems could well be significantly exacerbated this year.
“Quarterly rent is obviously one of the biggest expenses a company has to pay, and if it already has problems, this can be a decisive blow, especially in the current economic climate.
“Landlords are generally commercially astute enough to accept a proportion of the rent that is due to them, as opposed to none at all, so when businesses are in financial strife, there may be an opportunity to renegotiate rent terms, through arrangements such as paying on a monthly basis or agreeing a temporary payment reduction or holiday.
“We would strongly urge anyone who feels their company could be facing severe financial problems after Christmas to take action now, and get the sort of professional advice that might help them to continue to trade through 2009 and beyond.”