RegionsEEAUK SMEs Report Late Payments Problem Worsening

UK SMEs Report Late Payments Problem Worsening

Owners of UK small and medium-sized enterprises (SMEs) report that their cashflow is being “tested to the limit” by the problem of late payments, according to a survey by alternative finance provider Platform Black.

The company says that it surveyed hundreds of UK businesses and two thirds said that clients are taking longer to pay than they did a year ago, while 33% said that at least half their clients routinely pay their debts late.

Seventy-eight per cent of late payments are more than 10 days overdue and 31% are more than a month past the due date.

Platform Black said that one SME owner who responded to the survey wrote: “Clients now see it as their right to pay late. This cripples cashflow and damages our confidence. We work in constant fear of taking a big hit.”

“Our research confirms what many businesses have long suspected – that growing numbers of SMEs risk falling into a double-pronged liquidity trap,” said Platform Black’s chief executive officer (CEO), Christopher Shaw. “Five years after the credit crunch first hit, banks are still withdrawing many SMEs’ overdraft facilities, while the lack of overall liquidity has trickled down industry to cause an epidemic of late payment.

“Even vibrant companies with a strong order book are being stretched to breaking point by a perfect storm of late-paying clients and banks that are reluctant to offer credit. As a result alternative sources of finance have moved from the exotic to the essential.”

Related Articles

“Destroy or democratise” – how Open Banking will impact connectivity

Banking “Destroy or democratise” – how Open Banking will impact connectivity

3m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

3m Victoria Beckett
Money market reforms: Navigating LVNAV, CNAV and VNAV

EEA Money market reforms: Navigating LVNAV, CNAV and VNAV

4m Victoria Beckett
The Challenge of Building and Maintaining a Central Treasury Operation in a Decentralized Company

EEA The Challenge of Building and Maintaining a Central Treasury Operation in a Decentralized Company

4m BELLIN
The Treasury Challenge of a Post-Merger Integration

EEA The Treasury Challenge of a Post-Merger Integration

4m BELLIN
The Challenge of Integrating Worldwide Subsidiaries into one TMS

Baltics The Challenge of Integrating Worldwide Subsidiaries into one TMS

4m BELLIN
Q&A with BMG's treasury : BELLIN - We Love Treasury 2

EEA Q&A with BMG's treasury : BELLIN - We Love Treasury 2

4m BELLIN
PSD2: dull name, but seismic effect

Clearing & Settlement PSD2: dull name, but seismic effect

4m Alex Kwiatkowski