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Hitachi Finds Surge In Entrepreneurs Fearing Collapse

Hitachi Capital Business Finance has found a surge in the portion of small and medium-sized businesses (SMBs) that fear collapse of their firms in the U.K.

According to London Loves Business, Hitachi Capital’s report for the 2018 third quarter revealed 10 percent of the 1,201 small businesses surveyed are concerned that their companies will collapse within three months. It’s about double what Hitachi Capital typically finds in the SMB population: Reports said the rate hovered around 4 percent or 5 percent for the last seven quarters.

Players in the retail sector are most concerned that their businesses will collapse by the end of the year, with 17 percent of entrepreneurs in the space revealing this concern, compared with 12 percent in Q2, according to the firm’s Business Barometer. Eight industries examined by Hitachi Capital saw increases in the portion of businesses fearing collapse, reports noted, while the portion of small businesses that expect growth in the coming quarter has hit its lowest rate in more than one year.

“For the last year, our research has shown that the small business community has seen political and economic change as an opportunity. Many have looked to expand into markets beyond the U.K. and create jobs in the communities where they do business,” said Gavin Wraith-Carter, managing director for Hitachi Capital Business Finance, in a statement. “Our latest findings, though, suggest the protracted nature of Brexit negotiations may now be taking its toll.”

The Barometer found that 41 percent of businesses that fear impending collapse prioritize a reduction in fixed cost, while 27 percent are focused on improving cash flow. Businesses concerned with collapse are also more likely than the average small business to look beyond a traditional bank for financing, and to reassess their financial commitments.

“It’s also clear from our latest research that small businesses are focusing heavily on the financial health of their business whether this be improving cash flow, getting tougher on late payment or looking for better ways to secure finance,” added Wraith-Carter. “The key thing is that they shouldn’t leave it too late.”

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