A recent survey by the Insurer, Zurich, revealed one in eight small businesses have considered closing their doors in the last few months.
Despite news of a growing economy and a fall in company insolvencies, Zurich’s SME Risk Index revealed one in four SMEs have had to make staff redundant or lower the prices of their products.
Out of the 500 small firms that were surveyed, nearly half felt concerned about keeping up with cashflow, yet just under a quarter were worried about debt.
While there has been a fall in company insolvencies (including those in administration and liquidation), there are a number of small firms that are still uncertain about their future and are much closer to the edge than they would like to be.
Richard Coleman from Zurich, commented, “Our research demonstrates that while concern about risk amongst SMEs is falling, the risks themselves are still very much there. That the number of companies considering closing down because of the economic climate has remained consistent over the past 12 months, suggests that serious financial difficulties are still on the agenda for many.”
Sadly, there will always be businesses in financial distress and this survey only goes to show the underlying issues in a recovering economy. However, there are options available for companies that are struggling with cashflow, like time to pay deals (TTP) or company voluntary arrangements (CVAs). These powerful rescue tools can help to ease creditor pressure as well as restructure the business debt.