More than half of all new businesses started in Britain fail to last beyond five years.
Survival rates are lower than before the banking crisis, research by commercial insurer RSA found.
Failure has been ascribed to the tax system, scarcity of bank loans, and the cost of running a business.
Other problems mentioned included the presence of too much red tape and the late receipt of payments.
Figures from the Bank of England this week show that net lending to small and medium businesses through the Government’s Funding for Lending scheme was down by £400m in the second quarter of this year.
Waiting in the wings is the potential increase in interest rates which could spell difficulties for new businesses trying to establish themselves.
RSA found that UK businesses are increasingly more likely to be “micro” in size, that is having up to only nine employees.
Since 2000, there have been 1.4 million new micro businesses, a rise of 43%.
Micro enterprises now comprise 95% of all private sector companies.
