Struggling to pay off debt

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TEN thousand businesses in the south east are only paying the interest on their debt and not repaying the debt itself, according to new research by insolvency and restructuring trade body R3.

The number of businesses in this position – equivalent to 3.6 per cent of businesses in the south east – has decreased slightly from last year’s 15,000 businesses.

Mike Pavitt, chairman of Southern Committee of R3 and corporate restructuring and insolvency partner in Paris Smith, said: ‘Apart from the initial shock of the EU referendum result, the business environment has so far been relatively benign over the course of 2016. It’s likely that otherwise healthy businesses are taking advantage of record low interest rates to keep cash in their business.’

According to the research, 7,000 businesses in the south east are struggling to pay debts when due – a decrease from last year’s 21,000.