Almost 50,000 property and construction businesses are at risk of going bust after the UK's vote to leave the EU, according to the UK's leading independent insolvency firm.
Already considered to be in 'significant' financial difficulties before the referendum, a mooted 20% drop in London house prices could send them over the edge says Begbies Traynor (BEG:AIM), which carried out the research.
And while businesses across the country were in good shape heading into the referendum vote, Begbies said management teams across the country should be braced for 'six months of turmoil ahead'.
'The Bank of England's commitment to maintaining interest rates at a record low, as well as the government's inference that they might cut corporation tax to less than 15 percent, could help to stabilise the economy and consumer sentiment over time,' said Begbies' Traynor executive chairman and founder Ric Traynor.
'However we expect the business environment to worsen over the next six months, at least, before we settle into the 'new normal.'
Begbies, one of the few beneficiaries of higher levels of corporate insolvency, reported last week that activity in its markets were at their lowest levels since 2004.
Back in May, Shares has highlighted how a return to more normal rates of insolvencies could help Begbies, even without a recession.
In a full-year results statement last week, Traynor maintained he was 'cautious' about the company's performance in the year ahead.
Revenue declined 8% in Begbies Insolvency and Restructuring arm in the 12 months to 30 April, though group-wide revenue grew because of a contribution from acquisitions.
While there is now the potential for higher levels of corporate distress, according to Traynor's commentary, general business performance was strong in the run-up to the referendum.
Begbies Red Flag Report says in the three months to 30 June, the level of 'significant' financial distress declined by 4%.
'Our data shows that levels of 'Significant' corporate distress decreased across all regions and all sectors of the economy in the lead up to the Referendum vote; the first time we've seen such an improvement since the period immediately following last year's General Election,' adds Begbies Traynor partner Julie Palmer.
'This suggests that UK businesses were in a relatively stable and improving financial position ahead of the Brexit vote, however we expect this trend to reverse as a result of the uncertainty created since then.'
Shares in Begbies Traynor trade 4.3% higher at 51p.