Small businesses prove most resilient

The UK business community is at its strongest since July last year with smaller businesses the most resilient, according to the latest Insolvency Index from Experian.

The global information services company has released research showing that although the average business insolvency rate increased slightly in October, the average financial strength score of active businesses reached 81.14 during October, compared to 79.80 in October 2008. 

The financial strength score predicts the likelihood of a business failing in the next 12 months with 100 being the least likely to collapse. The figures show that businesses are generally in a stronger financial position than previously with a smaller chance of failure in the coming year.
The insolvency rate, calculated by comparing the number of businesses that failed with the total number of businesses in the UK, rose from 0.09 per cent in September this year to 0.10 per cent in October, or 10 businesses in every 10,000 collapsing.

Businesses of one or two employees not only proved most resilient but also showed the greatest improvement in terms of their financial strength score during October, up to 82.22, compared to 80.85 in October 2008.

Regionally, the South-west was the only area to experience a year-on-year fall in the insolvency rate with Yorkshire having the highest rate.

Businesses of between 11 and 25 and 26 and 50 employees showed the highest insolvency rates.

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