Scotland's small businesses more likely to fail says KPMG

More smaller than larger firms are going bust north of the Border, according to a report released today by accountancy firm KPMG.

The total number of Scottish corporate insolvency appointments rose by 17 per cent quarter-on-quarter to 329 in the three months to 30 June, KPMG said.

But the number of administrations and receivership appointments - which usually affect larger businesses, according to the firm - fell by 19 per cent to 43 during the second quarter.

This was outweighed by a 24 per cent rise in liquidations to 286, which KPMG said tended to affect smaller companies.

Blair Nimmo, head of restructuring at KPMG in Scotland, said: "These are still tough times for smaller businesses and, while the headline figures may look disturbing, further analysis highlights fewer problems for larger companies, which has to be good news.

"2011 has in general been much quieter for corporate restructuring than 2010 and we have found the trading performance of some previously under-performing businesses has been improving. Also, despite the common view to the contrary, even in certain distressed situations, new funding can be found. Despite tax increases, spending cuts and lack of confidence, we have not seen the dramatic impact some have predicted."

Official insolvency statistics from the Accountant in Bankruptcy are due to be published on Wednesday.