The research, which explores the financial position of businesses in the UK, reveals that smaller businesses owe on average around £110,000 to the bank, £82,000 to trade creditors and £27,000 to the Crown. Yet it is debts owed to trade creditors that cause the most concern.
A third of all businesses (32%) say they are worried about the amount they currently owe in trade debts; while 24% are worried about finance, overdraft and banks loans; and 18% are concerned about Crown debts, such as VAT.
R3 President Steven Law commented:
“In a fragile recovery, debt is an important part of working capital in most businesses. With VAT rises to come and the impact of public sector cutbacks yet to be felt in full, many businesses are concerned about their ability to repay the money they owe in fragile conditions.
"Worry about trade debts is often more keenly felt as businesses deal with this creditor group on a day to day basis - these debts can therefore seem more obvious than those owed to the bank or the Crown.”
Businesses in the Midlands describe themselves as more worried about their debts than those in the South or North; while businesses in the manufacturing sector are more concerned than those in the other key sectors.
Steven Law concluded:
“Early professional advice is the best way to allay fears over debt levels. Ascertaining whether your current debt levels are sustainable should fiscal and monetary policies change is an important challenge for all businesses.”
