1.3 Million Small Businesses Hindered by Bad Debt
One-in-four UK small and medium enterprises have experienced bad debt over the last year causing 27% to suffer reduced profits
A quarter of UK small and medium businesses suffered from bad debt over the last 12 months, totalling approximately 1.3 million small firms, Bibby Financial Services’ (BFS) latest SME Confidence Tracker has reported
The study highlighted the negative impact on small firms that had been unable to recover debt, with 27% of business owners saying it has been detrimental to profits and 5% having revealed it had led them to delay investment plans.
Shockingly, 4% of business owners admitted dealing with bad debts had almost caused their businesses to fail.
Medium-sized companies, with turnover of over a £1m, have been particularly affected – 35% of medium sized businesses confirmed they had experienced bad debt over the last 12 months.
David Postings, chief executive of Bibby Financial Services, said:
“Bad debt is a serious issue affecting a large number of businesses in the UK. The issue is particularly problematic for smaller firms who have often footed the bill for upfront costs even though they don’t have sufficient cash flow to survive.
“Small and medium enterprises need to be aware of the implications of bad debt and how such losses can have an impact on their businesses.”