SME’s still Bearing the Brunt of the Recession

SME’s still Bearing the Brunt of the Recession

April 22, 2014 by Sandra

New research posted this week by data provider Red Flag has shown that whilst the UK as a whole is seeing a reduction in vulnerable businesses it appears that SME’s are still substantially more likely to be in poor financial health.

 Throughout the first three months of 2014 the data shows that SMEs account for 92% of all business within their highest risk bracket. SMEs seem to be in particular peril at the moment as their weighting within this group has risen by 22% since the beginning of the year. In total they accounted for approximately 208,000 of the 226,000 businesses under pressure.

 In general it has been those businesses that are consumer facing that have experienced the most drastic downturns so far this annum, the usual suspects of bars and restaurants make up 98% of the hospitality industries ‘significant risk’ segment and general retail is also widely struggling, rising 16% every year since 2008. Currently 13,130 retailers are within Red Flag’s highest bracket and 97% of those are SMEs. The most likely cause for the increase in troubled times for retailers is due to the bitter price war still raging on between Britain’s supermarkets.

 The data fails to show why SMEs are struggling but analysts believe that the biggest issue they face is accessing finance, although the Government is introducing new initiatives to encourage lending it fails to be seen if this will ultimately save many aspects of the UK’s economy. If your business is in financial trouble there are a range of options that may help it on the road to recovery, if you need help contact us.

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