Zombie firms on the rise

The proportion of companies which are only paying the interest on their debts has risen and now stands at 12,000 firms in the region.

Despite the rise, a smaller number of companies are reporting that they need to negotiate payment terms with creditors.

The research was conducted by insolvency and restructuring trade body, R3.

Mike Pavitt, chairman of R3’s southern committee said: ‘Although the wider economic picture isn’t a particularly optimistic one, fewer south east companies appear to be struggling to meet some key immediate financial obligations than in recent months.

‘With the growth of alternative lending providers over the past five years, it has become easier for struggling firms to move out of immediate financial danger.’