1/5 Of Companies Worried

Nearly 1 in 5 UK businesses has admitted that they harbour worries over the level of debts that are owed by them according to new research done by R3.

According to the figures, smaller businesses owe on average, £27,000 in outstanding various forms of tax, £110,000 to banks and/or building societies and a further £82,000 to various other trade creditors. 

Amongst the smaller business, it was the trade creditors that they were most worried about with almost a third (32%) expressing concerns over their monies owed to trade creditors compared with 24% and 18% worried about their outstanding liabilities to their banks and HMRC.  

R3 president Steven Law said, "In a fragile recovery, debt is an important part of working capital in most businesses. With VAT rises to come and the impact of public sector cutbacks yet to be felt in full, many businesses are concerned about their ability to repay the money they owe in fragile conditions. Worry about trade debt is often more keenly felt as businesses deal with this creditor group on a day to day basis - these debts can therefore seem more obvious than those owed to the bank or the Crown."

Businesses in the Midlands describe themselves as more worried about their debts than those in the South or North; while businesses in the manufacturing sector are more concerned than those in the other key sectors.

Mr Law also added, "Early professional advice is the best way to allay fears over debt levels. Ascertaining whether your current debt levels are sustainable should fiscal and monetary policies change is an important challenge for all businesses."

Posted at 04:51PM Nov 25, 2010 by Marc Stenton in Insolvency  |  Comments[0]