Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Over 110,000 UK small businesses at risk of bankruptcy due to lack of cash reserves

by August 7, 2024
August 7, 2024
Over 110,000 UK small businesses at risk of bankruptcy due to lack of cash reserves

A recent SME insights report by Dojo, a specialist in card payments for independent and enterprise businesses, has issued a stark warning: an estimated 110,940 UK SMEs are at risk of going bust due to having no cash reserves to support business operations.

The report found that 2% of surveyed SMEs lack any cash reserve, placing them in a precarious financial situation. Additionally, more than 30% of SMEs identified rising inflation and high interest rates as their primary challenges for 2024. The study also revealed that one in six SME owners were somewhat unconfident in their understanding of the term “cash runway,” which refers to the number of months a business has until its cash runs out.

Dojo’s survey uncovered that soaring costs were cited as the biggest challenge by 30% of businesses, with 36% responding by raising their prices to mitigate these pressures.

Key findings from the report:

No Cash Reserves: 2% of businesses have no cash reserve, translating to an estimated 110,940 UK SMEs at serious risk.
Small Businesses Vulnerable: Among smaller businesses with 1-9 employees, 10% reported having no cash runway, with 41% experiencing significant financial stress.
Limited Cash Reserves: Nearly 28% of business owners indicated they had less than four months of cash left to support their operations. This was most prevalent among businesses with 10-49 employees, where 56% had up to four months of cash reserves.
Healthy Reserves: About 30% of small businesses reported having five to six months’ worth of cash reserves. This was particularly common among businesses in the education sector (41%), those with a turnover of £1M – £9.99M (35%), and companies with 50-99 employees (34%).
Long-Term Stability Concerns: Only 2% of businesses had over a year’s worth of cash reserves, indicating significant vulnerability in long-term financial stability for the majority of SMEs.

Mya Akbar, a business accounts expert who spoke exclusively with Dojo, recommended that small businesses maintain a cash reserve of at least three to six months’ worth of operating expenses. For businesses in volatile industries, a longer reserve of six to twelve months is advisable.

Akbar emphasised the critical importance of cash reserves, saying: “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.”

Read more:
Over 110,000 UK small businesses at risk of bankruptcy due to lack of cash reserves

0
FacebookTwitterGoogle +Pinterest
previous post
UK Government urged to avoid replicating Irish housing crisis
next post
Watchdog bans Gemma Collins advert promoting headset to treat depression

You may also like

Getting to Know You Profile: Andrew McNeill

December 21, 2023

Rachel Reeves embarks on New York mission to...

July 23, 2024

Serial entrepreneur Sir Tom Hunter calls for 15%...

August 23, 2023

Former Apprentice winner Sian Gabbidon is ‘ready to...

October 20, 2022

Hong Wei Liao Is Building a Life That...

May 7, 2025

Buy-now pay-later complaints jump as shoppers rely on...

February 20, 2023

AI could consume nearly half of global datacentre...

May 23, 2025

Why CAC and LTV are ‘must know’ concepts...

March 8, 2024

UK New Car Market Sees 22nd Month of...

June 6, 2024

Fifth of UK office space fails EPC energy...

July 17, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • House of Lords AI summit at London Tech Week warns of ‘skills cliff edge’ threatening UK’s competitive future

      June 11, 2025
    • Tariff tensions force Spain’s food giants to seek markets beyond the US

      June 11, 2025
    • Sizewell C secures £14.2bn state boost – but energy savings won’t come for a decade

      June 11, 2025
    • Michelle Mone-linked PPE firm faces £122m high court battle with government

      June 11, 2025
    • Entrepreneur turned away from London Tech Week for bringing baby sparks industry backlash

      June 11, 2025
    • Global economy faces bleak outlook as World Bank warns of worst decade since 1960s

      June 11, 2025

    Categories

    • Business (8,183)
    • Investing (2,027)
    • Politics (15,591)
    • Stocks (3,141)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved