Today, we’re looking at a warning sign for UK businesses, credit control teams, debt recovery teams and commercial collections.

What Has Happened?

BTG’s Red Flag Alert data shows that UK businesses in critical financial distress have increased by more than a third. In Q1 2026, 62,193 companies were in critical financial distress, up from 45,416 in the same period last year. That is a 36.9% year-on-year increase.

This is not just a number on a spreadsheet. Behind it are businesses struggling to pay suppliers, meet payroll, manage tax obligations, deal with energy bills and keep cash moving. For creditors, the warning is clear. The longer an invoice remains unpaid, the greater the risk that the debtor’s position gets worse.

The Sectors Under Pressure

All 22 sectors monitored by Red Flag Alert saw a ...