SMALL businesses in Blackburn and Burnley were burdened with £1.9million of trade debt during the last financial year, making them the worst affected in the north west.

The research highlights that despite the economic upturn, the strain on East Lancashire SMEs in particular remains severe.

Compared to the national trade debt average of £1.5million, north-west small firms were in a slightly better financial position. However, the trade debt levels of Blackburn and Burnley SMEs were considerably above the national average.

Overall, micro-SMEs with one to nine staff and a turnover of less than £2million were proportionately the hardest hit, each contending with £46,000 worth of trade debt and 12 per cent in severe debt trouble.

The findings, by online commercial debt recovery law firm Debt Guard Solicitors, were based on official account details submitted to Companies House by 819 north-west SMEs.

A key research finding, according to Debt Guard, was that 12 per cent of north-west micro-businesses had dangerously high debt levels reaching one third of annual turnover. Highlighting the scale of the financial squeeze on the region’s smallest businesses, micro-SMEs each averaged £46,000 worth of trade debt, equating to 16 per cent of turnover.

Mark Burgess, chief operating officer at Debt Guard Solicitors, said: “This research highlights the financial headache caused by outstanding and unpaid bills. It is clear that the Lancashire smaller SMEs in particular need much greater support in this respect, as many are facing the very real threat of closure due to trade debt pressure and late payment.

“Our message to all SMEs struggling with late payment is, ‘don’t write off your debt’, look at legal ways to professionally recover it as, by improving credit flow, this will help put your business on a more stable financial footing.”

Trade debt stands for money owed to a business – including current invoices and overdue payments – for goods and services supplied to customers over the course of the financial year.