Recorded decline in small business failures

The UK small business environment continues at a positive pace in July, according to new data.

Research by Experian shows that small business insolvencies fell again, recording a massive 33% decline in July.

The total number of companies that closed down came to 1,542, compared with 2,312 in July the year before. This equates to an insolvency rate of 0.08%, compared to 0.12% in July 2009.

Large firms are unfortunate as they see a recorded increase in insolvency rate. However Wales registered the biggest improvement. Insolvency rates have halved this year, showing a decline from 0.14% to 0.07%.

Additionally, business financial strength score in July was 80.61, which is still below the 12-month high recorded in December, but heading in the right direction. Results have shown that the rates were slightly higher than the 80.83 recorded in June.

Max Firth, managing principal of pH, an Experian company, said:

“July's data indicates that the SME population is faring much better in terms of insolvencies than it did this time last year. However, increasing failures at the top end of the market demonstrates clearly that there is a still a great deal of uncertainty.”

“Given this ever-changing picture, it is vital that organisations ensure they understand and proactively manage the risk that those they do business with exposes them to.”