EACH Yorkshire SME (small and medium-sized enterprise) was, on average, burdened with £1.6m of trade debt during the last financial year, according to a new survey.
The findings, by online commercial debt recovery law firm Debt Guard Solicitors, are based on account details submitted to Companies House by 506 Yorkshire SMEs. Micro-smes in Yorkshire with one to nine staff and a turnover of less than £2m were the hardest hit, with eight per cent reported to be in severe debt trouble, the survey said. The average national trade debt was £1.3m. Sheffield SMEs suffered the most, according to the research, and had a higher average debt level than their Leeds counterparts - £2m compared with £1.4m. A key research finding, according to Debt Guard, was that eight per cent of Yorkshire’s micro-businesses had dangerously high debt levels which reached one third of their annual turnover. However, this was slightly lower than the national average of 12 per cent of micro-SMEs entering this “danger zone”, the survey said.
Mark Burgess, the chief operating officer at Debt Guard Solicitors, said: “This research highlights the financial headache caused by outstanding and unpaid bills. It is clear that Yorkshire’s smaller SMEs in particular need much greater support in this respect, as many are facing the very real threat of closure due to trade debt pressure and late payment.”
Trade debt is money owed to a business for goods and services supplied to customers over the course of the financial year.