Small businesses in Ireland are becoming subject to bad dept and huge cash losses because their trading partners in the UK are running out of funds.
“The UK and Irish SME (small and medium-sized enterprise) sectors are closely linked, with many SMEs in both countries trading directly with one another. What happens in the UK has significant knock-on effects for Irish SMEs,” Bibby managing director Mark O’Rourke states.
O’Rourke cites international research that alleges that more than a third of small and medium-sized businesses in the UK will run out of funds by July unless trading restrictions are eased.
If the trade restrictions in the UK last until the Q3 of 2020, half of the UK’s small and medium-sized businesses may run out of funds.
Bibby further cites that British small and medium-sized businesses have already written off an average of £35,000 (€40,000) of bad debt in the first two months since the Coronavirus pandemic broke out.
“The research gives a stark warning that, in the midst of the current crisis, our small and medium-sized businesses are more exposed than ever to the damaging effects of bad debt and a lack of cash flow,” Mr O’Rourke stated.