Exploring the performance of small- and medium-sized enterprises through the credit crunch

Small and Medium sized Enterprises (SMEs) make a major contribution to most western economies. They are often supported by government policies and in UK the government encourages banks to lend to them. It is generally believed that the credit crunch will have had an impact on performance of SMEs. This study looks at the impact of the crunch using large samples from 2007 through to 2010. It looks at performance by Region, Age and Industrial sector (SIC code). It then proceeds to explore the modelling of default over the years and especially focusing on young businesses. It is found that there is a degree of stability within the models, though, the level of default varies across years. Young businesses, as has been found before, are shown to be more vulnerable.