SMEs 'deemed at greater risk of credit defaulting'
Commercial insurance
27th November 2009
Small and medium-sized enterprises (SMEs) in the UK are still struggling to access finance as many are being deemed a higher credit risk.
Research carried out by credit referencing agency Graydon UK discovered that 62 per cent of such firms - over two million smaller companies in the UK - are believed to be at "above normal" risk of defaulting or developing financial problems.
The study also revealed that the proportion of SMEs with a poor credit rating has increased from 60 per cent in June this year, despite assurances by the banks that they are making loans more readily available to small organisations.
Martin Williams, Graydon UK managing director, remarked: "In an era of easy credit, the truth was that no one really noticed or cared much about the declining value of available information on businesses at Companies House."
Business insurance customers may be interested to learn that the number of compulsory liquidations and creditors' voluntary liquidations among UK firms fell by 4.7 per cent in the third quarter of this year compared with the previous three months, although it was 14.6 per cent higher year-on-year.
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