Northern Ireland SMEs named highest in debt

Northern Irish SMEs (small and medium-sized enterprises) have the highest level of debt in the UK, according to new research published by company formation experts Turner Little. The study, based on data from compiled by UK Finance from banks and building societies including Barclays, Lloyds, HSBC and Nationwide, revealed that Northern Ireland has a debt of £98,192 per business.

 

Average debt per business

The figure of £98,192 per business is almost three times the national average of £33,840. That's more than four times that of companies in Southeast England, where it's just £22,472 per business. The next highest debt levels were seen in Southwest England, Scotland and Wales.

All in all, the report highlighted that seven out of 12 regions surveyed exceeded the national average of debt per business.

However, although Northern Ireland topped the chart for indebtedness as a region, on a city level, the picture looks different. The most indebted cities in the UK are all in England, with Exeter leading with a 'staggering' debt of £357,770 per business, followed by Gloucester at £296,110 and Norwich at £229,074.

Concerning level of business debt

That said, although debt is high, SMEs' borrowing level has not increased across the previous year. Turner Little's Managing Director James Turner noted:

"Even though we didn’t find any direct correlation between the level of business debt and economic productivity, abnormal deviation from the national average in either direction probably isn’t a good sign. While excessive borrowing often goes hand in hand with financial hardships, extremely low debt levels may indicate that businesses are perhaps not investing enough in innovation, research and development. Either way, it’s bad news for the economy."

Countering excess business debt

There are a number of ways that you can counter or reduce excess business debt.

If your company or organisation is facing excess debt, it's important to make sure that you have robust repayment plans in place. This means both ensuring you borrow within your means by considering both short- and long-term options, and implementing the right processes so that your own cashflow from clients and customers is secure.

To learn more about Dukes Bailiffs Debt Recovery and how we can assist you with future-proofing your cashflow, contact one of our operators or visit our website here.