SMEs have come through the recent slowdown relatively unscathed. Not only is the financial performance of SMEs already improving, but the number of small firms failing is growing at only a modest rate, according to the HSBC’s 'Focus on SMEs' report.
Profitability for SMEs in some sectors has already started to recover and the number of firms closing has been well short of the totals reached in the early 1990’s. Significantly, liquidations among limited companies were 11 per cent higher in 2002, while bankruptcies of sole traders and partnerships rose by only 4 per cent.
According to HSBC, the relative success of SMEs is due to more efficient use of resources than their larger counterparts and, while larger firms continue to be more profitable than the smaller ones, the gap has virtually disappeared.
