Late payment remains a serious concern for British businesses, with small and medium-sized enterprises hit the hardest. There has been a multitude of government initiatives and small business commissioners and ministers that have pledged their devotion to the fight, but nothing has drastically changed. Late payment persists. Recent events such as Carillion’s collapse, the bad weather back in March, and the prolonged uncertainty surrounding Brexit, have all aggravated the plight of the SME community.
The study, conducted by small business finance provider Liberis, revealed that on average respondents were owed £11,000, which totalled up to £14.9 billion across the UK’s 5.7 million small firms. While this number has dipped slightly since last April, when a study touted the debt to have reached £44.6 billion, SMEs need to see that number disappear completely. Small businesses make up the backbone of the UK economy and late payment has already driven many into insolvency. If something doesn’t shift, by next April, these businesses could be cleared off the streets completely.
At the Credit Protection Association, we focus our efforts on improving our Members’ finances, mending holes in cash flow as well as providing the opportunity for further expansion. A lot of our Members need to be dragged back from the brink of insolvency, and we are more than happy to oblige.
The research, which polled over 400 SMEs in the UK in March, found that 58 per cent of small firms are currently owed up to £10,000 with 27 per cent owed more than £20,000.
In addition, 50 per cent of respondents claimed that aged debt has hindered investment in their own business, while 72 per cent said they spent three days a month chasing money they were owed.
“The Government continually stresses the importance of small businesses to the nation’s economy,” said Rob Straathof, Chief Executive of Liberis.
“But with mounting debts owed by their clients and customers, some SMEs are at breaking point.”