Late payment crisis threatens small business growth
A late payment crisis is hitting the small business community. Two thirds of small businesses say they have been affected by their customers failing to pay them on time – a particular issue for larger small businesses that employ between 10-49 people and those that have been trading for 35 years or more. These findings come at a time when an estimated 50,000 businesses collapse due to late payment issues.
As part of our quarterly survey of UK small business owners, we also asked small businesses what their priorities were in the months ahead. Cash flow management and late payments emerged as the two biggest issues that small businesses wanted to crack down on. Our study also revealed that around one in two small enterprises have received payments a week late, 44% have received them up to a month late and more than a third were paid over a month late.
When taking a closer look at the sectors, legal (79%) and manufacturing (77%) small businesses were found to be hit the hardest by late payments - some are still awaiting payments that were due in June. In contrast, those in the hospitality and leisure (34%) sector were the most likely to be paid on time. Regionally, small businesses in London and the North West were the most vulnerable to late payment issues.