The resilience of the U.K.’s small business community should not be underestimated, despite ongoing cost challenges including the continuing rise in the cost of borrowing and the scourge of late payment.

Purbeck Personal Guarantee Insurance surveyed the directors and owners of small businesses across the U.K. to reveal that 78% of small businesses are currently turning a profit. While 1 in 5 (19%) are breaking-even and 44% are in the black by a small margin, over a third (34%) said they are making a good profit. just 3% are loss-making and 1% close to insolvency.

The path to profitability has not been easy, however, as on top of general economic uncertainty, 81% of business directors report that they have been affected by the plague of late payment.  A quarter say the constant frustration of late payment has got worse in the last year and 5% of business directors in the survey said it is affecting their business significantly.

Purbeck’s findings come as the Federation for Small Businesses continues to lobby Government for greater measures to hold big businesses to account over the endemic problem of late payment.

Despite government support with energy bill relief and the current Energy Bills Discount Scheme, popular tactics amongst small business owners to help manage costs and cashflow have included reducing energy use and cutting staff pay rises, although only 7% of those surveyed has taken a pay cut themselves.

Commenting on this, Purbeck Personal Guarantee Insurance managing director, Todd Davison, said: “Working with small business leaders, it comes as no surprise that many continue to knock down seemingly insurmountable hurdles. When securing new finance, for example, many are now mitigating the risk of a personal guarantee backed loan through personal guarantee insurance.  This is just one of a number of ways directors and owners are increasing their resilience.

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“Whenever new finance is being considered it is sensible to prepare a personal guarantee request from the lender.  Personal guarantee insurance helps ensure that the risk is not all on the shoulders of the business owners and directors, should the business fail. It’s one less worry at a time when small business owners have so many other issues to consider.”