The Begbies Traynor Red Flag Alert has found that 16 per cent of UK dental practices are feeling financial pressures as they face the latest round of restrictions from the government after only recently starting to reopen.
As a sign that some in the sector are battling to survive, the latest Begbies Traynor Red Flag Alert research, which tracks the numbers of UK businesses in ‘significant’ financial distress, shows that 1,740 UK dental businesses now fall into this category – a rise of four per cent within the past year.
With just over UK 12,000 dental practices in operation, this highlights that around 16 per cent of all UK dental practices are currently in financial trouble.
However, with the closing of court activity and the government decision to give companies a stay of execution during the health crisis, the reality is that for many sectors, including dental practices, the true extent of the financial damage suffered has not been fully revealed yet.
Begbies Traynor, the restructuring expert, is suggesting that dental practices in trouble explore the options to restructure and thrive.
Ken Pattullo from BegbiesTraynor comments, “Many sectors across the UK business community have felt the financial impact of coronavirus and the dental practice sector is no exception. The rise in the number of businesses now recorded to be in significant distress is concerning, and it is clear that for some practices rebuilding a financially sustainable future, whilst dealing with the new operating requirements, is going to be a real challenge.
“But there is help available in the form of restructuring. Restructuring is too often looked upon as a last resort, but it is a method that many during this climate can use to their advantage.
“We’ve also developed a Fast Track CVA, which is an ideal solution if the business itself is still viable but needs the time and creditor support to recover. With these options a company can strengthen itself against future issues, something that may be needed with a tough winter ahead, with a possible second wave underway.”
The new requirements for additional safety measures such as improved PPE for staff, more frequent cleaning regimes and the implementation of social distancing measures, means that day-to-day operating costs have escalated at the same time as practices have had to accommodate fewer numbers of patients. Revenue and efficiency hits have also been incurred in the wake of fragile consumer confidence levels which has seen some patients reluctant to return for check-ups or treatment at this time.
Despite the government’s raft of financial measures to support the business community through the pandemic, many dental practices have struggled to access the help on offer. For example, the British Dental Association (BDA) reported that while a quarter of practices had applied for a government support loan, the vast majority (86 per cent) had been turned down.
An additional issue for dental practices has been the response of the insurance sector, with The Association of British Insurers warning that only a small number of companies in the UK will have cover which allows them to claim on their insurance for the impact of the pandemic.
“In such unprecedented times,” continues Ken Pattullo, “it is more important than ever that smaller sized dental practices access trusted and expert advice about managing the financial fall out of Covid so that they can continue to remain viable. With a second wave likely to cause more issues around operating safely, and the possible imposition of more lockdown measures, it is crucial that dental practices struggling to cope with financial concerns address them now, seek out the right help and advice and do not leave it until it’s too late.”
More Begbies Traynor News
Contact Begbies Traynor Group