ALMOST half the UK’s small firms have been left out of pocket due to trading partners or customers going bust.

New research by small firms’ online service CreditPal claims that 43% of small companies have been affected over the past two years

Its research estimates that the cost to the small firms sector could be as high as £5.3bn.

CreditPal chief executive Chris Poll said: “The amount left owing to SMEs (small and medium-sized enterprises) as a result of company liquidations is shocking and threatens the survival of some UK businesses.

“It is imperative that companies take every step to mitigate their exposure to the risk of defaulted payments, especially as the economy climbs out of recession when the need for cash is even greater.”

He urges firms to regularly use credit reports and referencing tools to establish the credit-worthiness of their trading partners.

“Ignorance of a business or trading partners’ up-to-date financial position is not an excuse.”

The study estimates the average amount owed to an individual small firm is £7,500.

Knowsley-based Tapes for Industry has suffered losses from the collapse of clients over many years, including four of its customers in the past two months.