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Credit crunch bite hurts SMEs, say experts

Jan 15 2008

The increase in the number of SMEs going bust indicates that the credit crunch is beginning to take affect claims a credit reporting firm.

Findings from Equifax shows an increase of 5.7 per cent in the rise of business failures compared to the same period in December 2006.

Neil Munroe, External Affairs Director, Equifax, says: 'SMEs are very vulnerable to bad debt. It only takes one customer to go bust, to jeopardise the future of a business.'

He added that credit checks, supported by 'ongoing monitoring of changes to the financial status of customers and suppliers' are the most effective ways to secure the future of a business.

The construction industry fared the worst with a 16.6 per cent rise in SME's collapsing.

A further 13.8 per cent rise in the number of business failures was reported in the service industry while the wholesale sector experienced an 11.8 per cent rise.

Meanwhile the Telegraph has reported that a group of entrepreneurs are to meet with Treasury officials tomorrow to discuss the plans to introduce an 18 per cent flat rate to capital gains tax.

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