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14/10/2009
Warning over small business insolvency |
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Many small businesses are still at risk of becoming insolvent, due to the continuing lack of credit, it has been warned.
Lecturer in entrepreneurship at the Cranfield School of Management David Molian remarked: "I think those businesses which are now going under have been fighting to get in every last penny and protect every last penny and now there is no more cash."
He warned that the improvement in order books could see some small firms take on "too much business" and end up overstretching themselves.
Those whose enterprises are struggling and may go bust could benefit from speaking to an insolvency lawyer, who can advise on their best options.
Earlier this week, accountancy firm PricewaterhouseCoopers (PwC) said there had been 1,384 company insolvencies in Britain during August.
The company stated that while this was the lowest monthly total since September 2008, it was still unusually high.
Mike Jervis of PwC Business Recovery Services said that there could be a rise in insolvencies through companies paying less attention to cash flow issues in the early stages of the economic recovery.
Written by Laurence Smith
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