Venture capitalist veteran John Moulton is anticipating a flood of corporate casualties when the Bank of England finally starts to lift interest rates but he insists that the small business sector is most at risk.
Better Capital chairman Moulton has recently re-entered the IT sector after acquiring Calyx, and is in the process of trying to turnaround the operation, with a view to jettisoning parts of the business and bolting on other buys.
Insolvencies in the channel have remained relatively stable throughout the recession and despite constant predictions of a pending bloodbath, resellers are proving to be a resilient bunch.
"Liquidations are not far off a 30-year low for industrial Britain because of the low interest rates, it is as simple as that," he told MicroScope.
There are many firms with a high gearing that are making just enough to service the debts - in fact the situation was a little worse at Calyx - which would have collapsed in the early 90s when interest rates were well above 10%.
"In 1992 many of these businesses would have been done, dusted and buried but nowadays they are still trading and the bank is quite happy," said Moulton.
"When interest rates rise, the thudding noise could be quite severe, as larger firms are less leveraged than they were in the 1990s but smaller companies have nearly twice as much leveraged relative to sales as they had in that decade," he added.
All this is leading Moulton, a man who makes his money from spotting opportunities in struggling business, to expect: "a fantastic level of company failures, it will come at some stage."
Earlier this month, the Bank of England kept interest rates at the record low of 0.5% for the eighteenth consecutive month and economists expect the Monetary Policy Committee to hold fire as the fragile economic recovery hangs in the balance.
Nitin Joshi, founder at ChannelMoney, did not foresee anything more than "marginal increases" in interest rates and doubted this would impact on small businesses.
In fact the channel was in relatively good shape despite the economy, he added, with banks operating more "sophisticated intensive care systems" for businesses that run into trouble, distributors working out issues with resellers and a rise in leasing that eases suppliers cash flow issues.