Business failures rise

Global financial problems are having a clear impact on SMEs, with corporate failures increasing for the first time in over a year. Figures from information services group Experian indicate that business failures rose by 8.5 per cent in the first quarter of 2008. The downturn appears to be gathering pace across a wide range of sectors: Agriculture (up 109 per cent), banking and finance (36 per cent), retailing (36 per cent) and textiles and clothing (30 per cent). Experian warns that firms need to reduce their exposure to credit risk and exercise caution with the credit they extend towards both existing and new customers. However, franchising remains strong, with 93 per cent of franchisees running a profitable business, according to the Natwest/bfa Survey 2007.