Growth in Lincolnshire business distress remains high
The number of businesses in Lincolnshire experiencing ‘significant’ or early-stage financial distress reached 2,130 in Q4 2025, up 9.6% on the previous quarter and 12.2 per cent compared with the same period in 2024, according to the latest Red Flag Alert research from leading financial and real estate advisory group Begbies Traynor.
The data reveals higher growth in business distress in Lincolnshire than in the UK as a whole. UK businesses saw a modest quarterly rise of just 0.3% in early-stage distress, with a year-on-year increase of 11.3%, bringing the total to 728,640 firms.
Lincolnshire’s construction industry was particularly badly affected, with 425 firms in financial difficulties, up 18.7% on the previous quarter and by 12.1% year on year. Food and drink production saw a doubling of distressed businesses between Q3 and Q4, affecting 24 firms, while year on year distress in the sector increased by 20%. Financial services businesses experienced a 50% quarterly rise in distress, affecting 66 companies, with a 24.5% increase in distress since Q4 2024.
Since Q3 2025, distress either fell or did not rise in eight of the 22 industry sectors tracked, including manufacturing (no increase, 53 business affected), automotive (-4.7%, 61 businesses) and general retail (-2.1%, 141 businesses).
In addition, 151 businesses in Lincolnshire were experiencing advanced or ‘critical’ distress in Q4, up 18% on the previous quarter and 14.4% on the same three months in 2024.
Gareth Rusling, who heads Begbies Traynor’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby, said “It is worrying that while the UK as a whole is beginning to see some softening in the rate of early-stage distress, levels continue to rise persistently in Lincolnshire and many businesses here are still under significant pressure.
“For business owners in Lincolnshire, the operational reality remains tough. We are speaking to firms that are working incredibly hard just to keep things moving amid higher costs, tighter margins and reduced consumer demand.
“More serious forms of distress are also still rising, which is a concern and could translate into higher insolvency rates as the year unfolds. As always, we advise that seeking support early can make a real difference when navigating these challenges.”
Begbies Traynor’s Red Flag Alert has tracked early and critical distress among UK businesses for nearly 20 years, using a range of trading, legal and financial indicators.