This follows recent criticism by Lord Sugar, the government’s
enterprise champion, who described struggling small companies as
Most small businesses have used their own cash to
get through the recession rather than rely on banks, the study by
Kingston University shows.
Only a quarter of the 343 firms surveyed saw significant profit falls.
“More than half of small business owners survived the recession and the
squeeze on credit by using their own savings and personal credit
cards,” the study said.
“This finding is a clear contradiction that all small and medium-sized businesses would suffer heavily in the downturn.”
It cited small businesses’ ability to “adapt, survive and thrive” in the downturn.
About 48% maintained or increased their profitability in the past year, it said.
‘They are bust’
Lord Sugar made his comments at a business event run by the Federation of Small Business in Manchester last week.
“I can honestly say a lot of problems you hear from people who are
moaning are from companies I wouldn’t lend a penny to,” he said.
“They are bust and they don’t need the bank – they need an insolvency practitioner.”
Formerly Sir Alan Sugar, he was made a Lord earlier this year so that he could join the government.
The Federation of Small Businesses also defended small firms, saying
they “lie at the heart of our economy”, adding they were “working hard
in difficult times”.
The Kingston University study surveyed
343 companies occupying commercial and industrial premises owned by
Workspace Group, who lease business space and commissioned the survey.