Almost three quarters of a million businesses in the UK are struggling to stay afloat, concerning figures reveal.
The figures mark the largest quarterly jump in the number of businesses in financial trouble since 2014.
The Red Flag Alert produced by insolvency specialists Begbies Traynor measured a jump of 93,000 firms in the first quarter of 2021, with businesses reporting huge shortfalls due to Covid.
It meant there were 723,000 businesses suffering in total, the report said, a 42% increase over the past year.
Begbies Traynor said companies in the logistics and real estate sectors saw particularly sharp increases in hardship over the first three months of 2021.
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The consultancy firm warned that for many, the eased restrictions may have arrived too late.
The latest Insolvency Service figures showed 992 companies in England and Wales were declared insolvent in March - a rise on the start of the year but still 20% down on March 2020.
Julie Palmer, partner at Begbies Traynor, said businesses should seek financial help at the earliest opportunity.
"Opening the doors of consumer-facing businesses on April 12 may well seem like a big step in the right direction for many of these companies as they try to shake off the traumatic trading of the last 12 months,” she said.
"However, our experience shows that unmanageable levels of debts and subsequent overtrading are likely to be the hidden icebergs waiting to sink even the highest profile businesses.
"Businesses that were profitable before the pandemic, have manageable debt and are still relevant in the post-pandemic world could flourish and be the real winners in this climate.
"They need guidance and need to act quickly. In a market that is moving fast, dithering companies will be swept away in the sheer force of distress that is forcing its way across the UK."
