More than 110,000 small firms 'at risk of bankruptcy'

09 Aug 2024

Over 110,000 small businesses in the UK are at risk of bankruptcy, according to research carried out by card payment processor Dojo.

According to the research, a large number of businesses don't have any cash reserves to support business operations. 2% of small and medium-sized enterprises (SMEs) don't have a cash reserve, and 30% of firms stated that high interest rates and inflation are amongst their biggest concerns for the rest of this year.

Additionally, amongst micro-businesses, 10% have no cash runway and 28% of firms have less than four months of cash left.

Just 2% of firms polled have over a year's worth of cash reserves, Dojo found.

Commenting on the matter, Mya Akbar, Business Accounts Expert spoke exclusively with Dojo, said: 'Cash reserves are vital for ensuring consistent operations, providing a buffer for unforeseen expenses, offering decision-making freedom, enhancing negotiation leverage, protecting against economic downturns, attracting investment and reducing financial stress.'

Source: https://dojo.tech/card-machine/how-uk-businesses-manage-finances-report-2024/