Less businesses are failing, says Equifax
Published: 20 September, 2010
LONDON: Business information specialist, Equifax, has released its latest figures on business failures across the UK, showing that despite continuing difficult trading conditions, businesses are doing their best to reverse the negative trend.
In August 2010, there was a reduction in the number of businesses that went bust across every sector compared to the same period last year. Overall there was a 13.2% drop year-on-year. There was also an 8.2% decline for August compared to July. Only the Retail sector saw a small increase in failures in August compared to July at 3.2%.
Nic Beishon, head of Equifax Commercial Information Solutions, said: "Our numbers suggest that the banks might have been responding to calls to free up their lending criteria to provide new funds to businesses. This could have played a part in helping businesses struggling with cashflow as they chase late payments.
"More often than not these are good healthy businesses – they just need a helping hand when late payments make it hard to balance the books at the end of the month.
"Headlines continue to report cuts in headcount as well as some fairly high profile failures. But a close control on debts and cashflow management certainly appears to be working for many businesses.
"The trend that we saw throughout all of 2009 for failures to increase has definitely been reversed –which has to be positive news for businesses and their employees.
"The speculation has continued about whether we are heading for a double-dip recession, but our Business Failures Report seems to indicate that all the right actions are being taken by UK businesses –and the organisations that support them – to survive in the continuing difficult trading conditions."