Alarming Number Of UK Firms Suffering From Bad Debts

Tue, 02 Jun 2009

An increasing number of UK businesses are suffering from bad debts as the recession deepens, new research has found.

A survey of 1000 UK accountants, carried out by asset based lender Venture Finance, revealed that almost three quarters (72 per cent) have seen an increase in their clients suffering with bad debt in recent months, with many firms unable to access credit from traditional sources such as banks .

Nearly a third of the accountants polled (31 per cent) reported that clients are now suffering an average debt payment delay of 14 extra days, resulting in a wait of six weeks for invoices to be paid, while some are being forced to wait an average of 30 extra days.

In addition, two-thirds (65 per cent) of accountants reported an increase in the number of clients seeking to protect themselves with services that protect or insure against bad debt .

Peter Ewen, Managing Director at Venture Finance, commented: "The proportion of UK businesses suffering from bad debt is alarming."

"At best, it can wipe out swathes of hard-earned profit, but at worst it can bring a previously strong business to its knees."
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