Increase in SME insolvencies 'still to come'

01/09/2010

Accountants are concerned the worst effects of the recession are not over yet and that there are still small and medium-sized enterprise (SME) insolvencies to come.

This is according to the results of the annual Credit Check survey which is conducted by Venture Finance and the Accountancy Magazine.

Some 60 per cent of accountants believe there will be more SME insolvencies in the coming months.

A third of the 250 accountants surveyed said UK business strength is weak or very weak.

Peter Ewen, managing director at Venture Finance said: "SMEs are the engine of economic recovery but the research suggests that they are still struggling to access the finance needed to move from a survival mentality to one of growth."

"Accountants are telling us that traditional financing methods are not meeting today's business needs and it is essential SMEs understand the full repertoire of funding they can access," he added.

Recent data from the Bank of England showed that lending to SMEs fell in June, demonstrating how credit conditions are remaining difficult for small businesses.

Posted by Emma Noble