Spiralling Costs Sink SMEs

29th January 2018.

Last week RSM reported that personal insolvencies were on the rise, and now it seems that company insolvencies are kicking at its heels. According to new research, in 2017 the number of companies on brink of insolvency saw a 4.2 percent rise, as it reached 17,243. This is of real concern for our small business members who are still struggling to survive increased business and interest rates. With Brexit uncertainty making small firms vulnerable, many owners are looking for an exit. Here at the Credit Protection Association we offer our members various credit management products to boost their cash flow, and get them back far from the brink.

These new figures were part of new research conducted by the Federation of Small Businesses (FSB). The chairman Mike Cherry shows great concern for the rising numbers of small business owners “looking for an exit” and sees rising operating costs as the cause for this drop in business confidence.

“It’s an increasingly unforgiving environment to trade in and we’ve seen business confidence dropping steadily over the past year”, Mr Cherry added.

The chairman further emphasised the impact that the recent Carillion collapse has had on small firms, as the construction crisis damaged supply chains across the UK.

“If the Government wants to see insolvency numbers fall in 2018, opening up more public contracts to small firms and making a reformed Prompt Payment Code mandatory for large corporations would be a good place to start”, Mike Cherry urged.

With business rates hiked, inflation at a high, and interest rates even higher, we have created a inhospitable environment for small firms. The steady flow of corporate insolvencies from Palmer & Harvey and Mulityork, to the latest, Carillion, have highlighted the risk involved in running a business in our current climate. Banks have proven to be of little help as they too have been the centre of a number of scandals in recent months. If small businesses are to survive and to grow, they must look to alternative funding options.

Here at the Credit Protection Association we offer various credit management products to boost a business’ cash flow and discourage further late payers and bad debtors. To avoid the risk of insolvency businesses must take care of their own cash flow and financial standing. CPA offers credit reports and advice on how to improve your credit rating, which will allow you to improve your business’ prospects. Contact CPA below for more information.