Many small and medium-sized firms fighting to survive
An increasing number of small and medium-sized enterprises (SMEs) are struggling to escape from the financial uncertainty left by the recession, according to a new survey.
Research by insolvency specialists Begbies Traynor shows that the number of UK companies that were suffering ‘significant distress’ in Quarter 2 of 2014 was 237,000, which is 60,000 more than the same period of 2013.
SMEs are suffering the most, accounting for about 90% of the total number.
The survey found that the number of large companies suffering significant distress actually fell by 9% in the same period. Although on the face of it, this would appear to be good news for the economy, it has given the larger firms greater muscle in the market, which has forced many SMEs to push their resources to the limit to survive, often leaving them in a precarious financial position.
Begbies say that it is a difficult time for businesses in the UK at the moment. Many are still being hampered by debts they took on during the recession. The issue of late payment also remains a major threat to smaller firms.
Experts at Begbies warn that a rise in interest rates, by even as little as 1%, could be the final straw for many of these smaller firms.
Please contact Thomas Nolan if you would like more information about the issues raised in this article or any aspect of credit control or debt management.