Not going up in an upturn.

We were told to worry about the recession. Now, worry about the upturn.

When it comes, it will not be as rosy as some might think. Just like unemployment, insolvencies are also a lagging economic indicator. Begbies Global Network, an insolvency firm, predicts an increase in insolvencies next year. This was the case after downturns in 1974, 1980 and 1990.

The biggest punch will be landed on small firms who risk a severe lack of working capital when they start growing again. This dilemma is exacerbated by the fact that there is very little competition between lenders. Foreign institutions have gone home and our domestic market is dominated by four banks. This is why the government refused to sell Northern Rock's lending assets to these banks.

Small firms do not have the best range of sources of finance. Apart from banks, their only saving grace is the government's loan guarantee scheme for enterprises.

In the upturn, they must hope for tax cuts - which is unlikely, considering our vast debts.