The number of West Midlands businesses calling an emergency debt hotline has rocketed by more than 50 per cent because of the credit crunch.
And the charity that runs the debtline says the record figures are only set to get worse as the global financial crisis intensifies.
Four local businesses a day are calling the Business Debtline, run by the Money Advice Trust to provide debt advice to small businesses and the self-employed.
It took 747 calls from businesses in the West Midlands in the first six months of 2008, compared with just 492 in the same period the year before.
And bosses at the service said they expected future figures to be even higher, predicting the effects of the loss of trade because of the credit crunch would be felt by businesses well into 2009.
The figures came as house builder Taylor Wimpey announced that first-half underlying profits had dived 96 per cent, to £4.3 million, as a result of the housing market downturn.
The firm, which is the UK’s biggest home builder by number of properties built, has offices in Cannock, Wolverhampton, Leicester, Solihull and Warwick.
That came as it emerged this week that the number of mortgage repossession orders in Birmingham had shot up by 64 per cent as the rising cost of living and relatively high interest rates put mortgage-payers under pressure.
Courts in the city issued 1,186 possession orders in the second financial quarter of the year, significantly up on the same period the year previously.
Nationally, the number of repossessions orders rose by 48 per cent on last year.
Vince Cable, the Lib Dem Treasury spokesman, set out proposals for helping struggling homeowners as the Government continued work on its plan to revive the economy.
Dr Cable said lenders should be barred from repossessing homes unless they can prove they have met strict criteria, including giving housing societies the chance to buy the property instead, Liberal Democrats have demanded.
Business Debtline manager Ann-Marie Kelly told The Birmingham Post the record numbers of calls had come because many businesses had not been around for a long time and so had no experience trading through what could be a recession.
She said: “As the last recession was 16 years ago, many current traders will have no experience of trading through such a dramatic economic downturn.
“Although there is still a debate as to whether or not we are currently in a recession, our figures show a significant increase in calls to our helpline between April 2007 and April 2008.
“We have also seen a massive increase in callers needing advice on bailiff powers between March and April this year
“The figures show that many small businesses are feeling the effects of the credit crunch with a slow down in trade as consumers start to tighten their belts and restrict the amount they spend on goods and services.
“Callers experiencing a trade shortfall has almost doubled between March 2008 and April 2008.”
She said any business or self-employed trader experiencing financial difficulty should get in touch as soon as possible, adding: “Further borrowing may not be the best option for your business so seek independent, impartial advice first”.
The Money Advice Trust was set up at the start of the 1990s – the height of the last recession – to help both individuals and businesses deal with unmanageable levels of debt.