Small firms with 50 to 100 employees have seen a significant fall in insolvency rates since February 2011, according to global information services company Experian.
The same firms also recorded the biggest year-on-year improvement in their financial strength.
Max Firth, UK managing director of Experian’s Business Information Services division, said: “Although business insolvencies increased slightly in February, our data is showing that UK business balance sheets have been improving gradually since August.
“Any increase in insolvencies among medium and large businesses highlights a riskier environment, particularly for the smaller firms that supply to them.
“Our insolvency figures underline the importance for smaller businesses to take as much care as their larger counterparts do when checking the credit worthiness of suppliers and customers before doing businesses with them.”