Debt Pressures Mount on North West SMEs
Debt pressures are reportedly mounting for SMEs in the North West according to new research, causing experts to call for ΓÇ£Early ActionΓÇ¥ in order to keep their financial options open ΓÇô a call which arrives at a time when the up-take of flexible office space has increased by more than 25%.
Produced by accountancy firm Baker Tilly, the research is presented via their SME Distress Monitor ΓÇô complied using data from Companies House and encompassing some 1,744 North West businesses with a turnover of ┬ú5m -┬ú25m.
Speaking to TheBusinessDesk.com, Baker TillyΓÇÖs Restructuring & Recovery Partner Lindsey Cooper explained:
ΓÇ£Our research highlights how severely short term debt pressures are mounting for SMEs in the North West. As liquidity is tightening, it is essential that business owners take prompt action at an early stage to maximise the financial options available to them, in order to minimise future problems.ΓÇ¥
This suggestion that businesses should consider injecting financial flexibility into their operations, comes at a time when an increasing number of North West business are turning to serviced office space.
Offering a flexible low capital alternative to conventional long-term leases, data from officebroker.com shows there has been a 26%YTD (Jan ΓÇô Aug) increase in the number of businesses choosing to enter serviced offices across the North West during 2011.
What is also of interest is that this data, which also records the average requirement of these serviced office bound businesses at just over 6 desks each, reveals that this increase has occurred despite enquiry levels only rising by 2% during the same period ΓÇô suggesting that business are viewing and acting on this option as a practical way of building flexibility into their financial resources.
But while the officebroker.com data shows that a growing number of North West businesses are taking steps to manage their costs when considering workspace, Baker Tilly points out that over 25% of SMEs across the UK saw their profits before tax drop by over 50% – reducing their financial resources which in turn could make bringing about such changes even more challenging ΓÇô as the statement from their press release below shows.
ΓÇ£With relatively high numbers of businesses currently financially distressed, taking action and seeking professional advice early will be critical. Addressing the issues as soon as possible can increase the options available to a business and consequently, their chances of survival.ΓÇ¥
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