A fifth of small businesses fell into their overdraft last year

Small businesses struggled to manage their cash flow last year, with one in five falling into their overdraft, found research by accounting software Fluidly.

Of the 19,799 businesses surveyed, those having to use their overdrafts rose from 13.9% in March 2019 to 17.8% in January 2020.

Plymouth came out top as the area where most small companies had to resort to their overdraft to survive, with 35.7% doing so, followed closely by Southampton (34.3%), Peterborough (32.8%), Shrewsbury (31.1%) and Preston (29.7%).

Other areas affected included Stoke-on-Trent (27.4%), Manchester (26.5%), Bristol (26.4%), Milton Keynes (26.1%) and York (26%). Reasons cited for this reliance on overdrafts included late payments, the impact of Brexit and continuing economic uncertainty.