BUSINESSES have failed to return to pre-credit crunch levels according to new research by accountants RSM Tenon.
The group’s Business Barometer found that 76% of entrepreneurs were still waiting for their business to return to the levels seen before the credit-crunch hit in 2007.
It said this raised new questions over the UK’s economic recovery and concerns over the prospect of a new insolvency epidemic.
The firm said one in 10 entrepreneurs believed it would take another three years for their businesses to return to ‘normal’ levels, while 30% were predicting it would take one to two years and 20% thought two to three years was a more realistic timeframe.
With so much uncertainty and fears for a double-dip recession, RSM Tenon said it was quite possible there could be around 20,000 business failures across the country this year.
The research, which questioned more than 300 entrepreneurs throughout the UK, also found the risk of a double dip recession had sparked 42% of businesses to review their plans.
In addition, 19% of entrepreneurs felt a lack of cashflow was a serious threat to their business over the next 12 months.
Bev Marsh, associate director of recovery at RSM Tenon in Birmingham, said: “There has been little progress down the road to recovery and many entrepreneurs remain sceptical that they will see any meaningful revival in the near future.
“The problems caused by the credit crunch have continued to linger and show no signs of disappearing. Margins remain tight for businesses, with many owners still unable to secure the additional funding they need.
“Further failures are inevitable in this climate and we can expect to see 2010 corporate insolvency levels match the record totals that we have seen in the last two years.”
