Small firms failing in crunch
Oct 31 2008
One in ten small to medium-sized enterprises (SMEs) cannot afford to stay in business due to the effects of the credit crunch, according to new research.
Figures from insurance group RSA found around 470,000 SMEs have already been forced to cease trading, with the research also showing the north is being hit the hardest.
Around 16 per cent of companies in the north of England are reporting they cannot survive, while just one per cent in the south-west are saying likewise.
Of the financial pressures affecting these SMEs, the majority say rising costs from suppliers are forcing them to the brink of failure.
Mark Skinner, small business director at RSA, says: 'SMEs are the backbone of the UK economy and are facing tremendous pressures in these uncertain economic times.'
Firms also reported factors such as rising rent and the higher cost of fuel are influencing their business.
However, companies in the Greater London area are not feeling the pinch as much, which RSA suggests is due to already being used to paying the higher costs of the capital.
A recent survey by the Local Government Association also found more than half of the councils surveyed reported companies are struggling to pay their business rates on time.
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