Small companies at the highest risk of becoming insolvent

A current study conducted by Creditreform has revealed that among the total number of insolvencies there are always more small and very small entities, whereas the percentage of larger enterprises going bust has remained virtually unchanged. According to this survey, the proportion of insolvent companies with a turnover of up to 0.1 million Euro has grown by 2.4 percent to 22.7 percent, while the share of those broke companies with an annual turnover of between 0.1 and 0.25 million Euro has grown by 1.3 percent and currently stands at 24.4 percent.

The period during which companies are most at risk of going bankrupt are, most of the time, the first four years of their existence: 31.9 percent of enterprises have to give up during this period (31.2 percent in the previous year). However, the number of broke companies which had already been operating on the markets for more than ten years has also risen from 34.1 percent in 2005 to 35.0 percent now. As is shown in a diagram the described trend is also underligned by figures regarding the number of staff working in those companies which have become insolvent: 77.3 percent (75.2 percent in 2005) of broke companies only employed up to 5 staff.

An in-depth analysis is provided by the “Insolvenzen, Neugründungen, Löschungen – Jahr 2006«brochure published by Creditreform e.V. and which is available for free-of-charge download. GERMAN