Car components suppliers in Birmingham and the West Midlands could be facing £20 million of bad debts, following the collapse of MG Rover.
The prediction was issued by the Birmingham Chamber of Commerce and Industry, which has been fielding the concerns of scores of small firms since the closure of Longbridge last month.
It came as the Government announced that thousands of workers, who lost their jobs when the car maker collapsed, had received redundancy payments totalling more than £20 million.
Trade and Industry Secretary Patricia Hewitt said that around 4,000 of the former Longbridge employees had received redundancy pay.
MG Rover's supply chain was so long and complex that many smaller companies may not even have been aware that they were producing parts destined for Longbridge, according to Sue Battle, chief executive of the BCCI.
Mrs Battle told a meeting of the Birmingham Strategic Partnership that diversification since the 2000 Rover crisis meant there were now not so many Midland companies dependent on MG Rover.
Mrs Battle added: "There could be £20 million of bad debts, but we don't really know at the moment."
The Government is allowing suppliers to defer tax payments up to the level of their MG Rover debts as an immediate first step towards financial assistance. But Mrs Battle warned: "We still expect there to be a lot more fallout down the supply chain."
The emergency benefit office set up in Northfield by Jobcentre Plus has dealt with more than 5,000 claims since MG Rover went into administration.
Lyndley Jenks, Jobcentre Plus business development manager, said: "All the stops have been pulled out by the team at Northfield who have been working to 10pm and at weekends in order to ensure that people have an appropriate and considered response."