SME's lose out on £5 billion as trading partners go bust

10/03/2010

Almost half of UK small and medium-sized enterprises (SMEs) have been left with monies owed to them as a result of their trading partners or customers going bust over the last two years, new research has revealed.

The CreditPal study estimates the total amount owed to SMEs to be around £5.3 billion, with the average amount owed to an individual business standing at £7,500.

The professional services sector including accountancy and legal services was owed the most amount of money, while the least affected sector was the hospitality and leisure industry.

London-based SMEs were the worst hit with 49 per cent owed money by trading partners who have gone bust, while those in Scotland fared better, with just 36 per cent affected.

Chief executive Chris Poll said: "The amount left owing to SMEs as a result of company liquidations is shocking and threatens the survival of some UK businesses."

He added that the survey highlighted the need for small businesses to ensure visibility of their trading partners financial status.

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Posted by Emma Noble