Some 498,000 SMEs stopped trading in 2007, a figure unmatched for 15 years, a new survey has revealed.
According to Barclays, it is estimated that nearly half a million firms closed last year, an 8 per cent increase on the number of failures in 2006.
This represents the highest rate of closure since 1992 when the recession was taking its toll.
The bank also reported that the total number of businesses declined by 22,000,the first time that the overall figure for trading businesses has shown a real drop in six years.
Barclays said the figures indicate that the slowdown in the economy is beginning to make its effects felt.
Steve Cooper, managing director of Barclays Local, pinpointed the sensitivity of small firms to difficulties in the economy.
He said: “The small business sector is generally the first to experience an economic downturn. We do know from our surveys that more small businesses are experiencing difficulty in getting payments. This will lead to potentially more business closures.”
Date:18 March 2008
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