Lincolnshire business distress continues to rise, with persistent pressure in property and construction

The number of businesses in Lincolnshire experiencing ‘significant’ or early-stage financial distress has risen by 3.7% over the past year, although the rate of increase has slowed compared with previous years, according to the latest Red Flag Alert research from financial and real estate advisory group BTG.

The data shows that 2,014 businesses in Lincolnshire were experiencing significant financial distress at the end of September 2026. This represented a 3.7% increase on the same point last year, compared with a UK-wide rise of 1.6%, taking the national total to 738,144 businesses.

However, the latest figures suggest that the rate of growth in significant distress has eased considerably. The year-on-year increase in Lincolnshire was 8.3% in Q3 2025 and 35.9% in Q3 2024, compared with 3.7% in the third quarter of this year.

The sector picture remains mixed, with eight of the 22 industry sectors monitored in Lincolnshire recording a fall in significant distress year on year. The largest decreases were in health and education (-21.4%), telecommunications and information technology (-19.8%), general retailers (-9.7%) and automotive (-7.8%).

Twelve sectors recorded an increase, led by construction, often seen as a bellwether for the wider economy (+26.8%), support services (+19.6%) and real estate and property services (+4.5%).

Gareth Rusling, who heads BTG’s Lincolnshire offices in Lincoln, Scunthorpe and Grimsby, said: “The latest figures show an encouraging slowdown in the rate by which Lincolnshire business distress is growing. However, more than 2,000 of our businesses in the region are still experiencing financial problems, and the overall picture masks some significant discrepancies between sectors.

“The rise in distress among construction firms is particularly concerning, as activity in that sector often reflects more general confidence, investment and the cost of borrowing, added to the fact that continued pressure has wider implications for the network of businesses that depend on it.

“With operating costs still high and uncertainty ahead of the Budget, businesses need to keep a close eye on cashflow and margins. Seeking advice early when problems emerge can help business owners understand their options and take action before financial pressures become more serious.”

BTG Red Flag Alert has monitored early and critical distress levels among UK businesses for more than 20 years, using a range of legal, financial and trading indicators.

For more information, visit www.btguk.com.