SME business failure rate increases

Stressed out

Published On 8 January 2007 at 15:45:02

Small to medium-sized enterprises (SMEs) were among the increasing number of high street firms that are said to have failed in the past year, claims a new report.

A study by Equifax has revealed that the retail sector saw a 17.2 per cent rise in business failures last year, with many SMEs forced to close their doors, reports Creditman.

It is thought that the rising popularity of the internet coupled with the increasing dominance of supermarkets is partially behind the figures.

Neil Munroe, the external affairs director at Equifax, confirmed that a number of the failures recorded would be small businesses.

"It is therefore vital that SMEs take advantage of the tools available to them to reduce the financial risks to their businesses," he said.

"Carrying out initial credit checks on customers and suppliers, supported by ongoing monitoring of any changes to their financial status is essential to protecting SMEs from the risk of bad debt and their business failing."

Welsh firms suffered the most failures last year, with a 13.4 per cent rise in failures posted.

 

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