More than 10,000 UK businesses failed in the first half of 2008 according to the latest figures from Experian, the global information services company.
According to Experian the number of firms facing insolvency is running at their highest level since the end of 2006 and 17.5 per cent up compared to the same period in 2007.
In the West Midlands the rise was considerably less, with 7.5 per cent failing compared to the same period last year.
Dominic Offord, insolvency specialist at law firm Browne Jacobson, said: “With very little sign that the credit squeeze is loosening its grip on business and a reduction of consumer confidence as a result of job, there is a strong likelihood that corporate insolvencies will rise over the next few quarters.”
“Advice about companies facing financial difficulties is being sought earlier as businesses really start to feel the pinch. The longer the credit crunch goes on the harder it will be for businesses to get their hands on new finance or negotiate their debts.”
Mr Offord said firms could protect themselves from the threat of failure in a number of ways.
He advised: "Should a company hit troubled times, managements needs to recognise that liquidation is not necessarily inevitable – options such as re-structuring, reviewing cash flow, re-negotiating payment terms and tightening credit control procedures can help companies avoid formal insolvency if taken early enough.
"Administration may also be an option – giving the company breathing space and present a way out of the woods."