The number of IT small and medium-sized enterprises (SMEs) in “significant” financial distress now stands at 36,000 - up eight per cent since the end of the first quarter and four per cent increase since the second quarter - potentially endangering 82,000 jobs.

The figures are from the latest Business Distress Index from business recovery firm Begbies Traynor's RealBusinessRescue unit, which analysed data from Red Flag Alert's proprietary credit risk scoring system and lists of County Court Judgements for unpaid bills.

The number of IT startups, created after 2017, in significant distress rose by 21 per cent in the last quarter due to the pandemic, read the report. There are now 5,454 of these fledgling businesses in trouble - a 46 per cent increase since the start of lockdown, when there were 3,732 in distress.

“These rapid increases for such small and young companies is worrying when considering that the total number of UK insolvencies in 2019 was just 17,196,” the company stated.

Shaun Barton, national online business operations director at RealBusinessRescue, said: "These latest results demonstrate that while some bigger companies are finding their feet in this recession it is the smaller companies that are suffering the biggest impact.

“Both SME and start up IT businesses are integral to the future of a technologically enabled UK - they are an enabler for our move into the future after having an idea and developing it."

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