Nearly one fifth of SMEs miss payday to stay in business
Nearly one in five of Britain’s small and medium sized businesses have missed at least one payday as they struggle to survive, new research has revealed.
According to npower Business, 17% of firms have found themselves in such a position, as they lack the finances to cover tax liabilities, supplier payments and other essential outlays.
The research comes despite SMEs being responsible for nearly half of economic activity in the UK, and is reflective on an increasingly competitive landscape.
Some 57% of businesses were found to be self-financing, as owners said they did not rely on any financial support. Less than one in five also said that they rely heavily on their own savings.
For the remainder, sourcing finance has proved difficult, although there are a range of alternative finance options that are growing in popularity.
There are concerns that some businesses are too reliant on themselves and that seeking external methods of finance could help them to grow, while also ensuring their long-term futures.
Longevity is a key issue for businesses and the latest research suggests that a growing level of communication is required so that they can share concepts that do and do not succeed.
Businesses were also divided on their growth prospects for the year ahead – while 36% were more confident than they were 12 months ago, 25% were also less assured.
Of the latter, two thirds attributed the anxiety to concerns surrounding Brexit and the issues relating to Britain leaving the European Union.
Should firms face financial difficulty for any reason, it is essential that they act quickly to find a solution – corporate insolvency services can provide an array of options that can be in the best interests of all parties.
Some solutions can provide a business with breathing space when in difficulty, while others such as liquidation are better suited to when all other avenues have been exhausted.
By Phil Smith