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Over a quarter of SMEs believe that they will become insolvent if the
economy suffers from a double dip recession, according to figures recently
released by R3.
The research, which looks at SME confidence in financial stability, suggests
that although the UK has emerged from recession, many businesses have been worn
out by the struggle to stay afloat.
R3 President, Peter Sargent, commented: "It is easy to forget that banks are not
a company's only creditors, for many their largest creditor is the Government.
"With close to 300,000 firms in crucial 'time to pay' tax arrangements with HMRC,
it seems that a large number of businesses are in need of a financial health
check.
The research found that the hotel and catering sector was the least positive
with 47% of businesses saying that a double dip could result in their company
becoming insolvent.
The most positive sector was the manufacturing industry, with 19% of businesses
believing that they will suffer if the economy falters.
Sargent concluded: "It is unsurprising that the services industry feel that they
will fare worst if there is another dip, as, although we are technically out of
a recession, many people dont feel the worst is over so they are not splashing
out on hotels and lunches.
"Post recession, the manufacturing sector tends to be the first to recover as
people slowly start to demand more goods.
"The journey back to recovery is slow and uncertain and we advise any business
owner who believes their company may be on the path to insolvency to seek help
sooner rather than later."
Source:
RedAlert
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