Businesses hit by rise in late payments
Many businesses in the UK are both getting paid – and paying – later, with the Covid-19 pandemic causing a surge in late payments. According to the latest independent research* from Close Brothers Asset Finance, three in five UK SMEs have experienced delays in receiving payments, while a significant number of business owners have admitted to being forced into delaying paying invoices.
“Firms have long struggled with late payments in the UK and the pandemic has seemingly made things worse,” said Neil Davies, CEO, Close Brothers Asset Finance and Leasing. “Our research echoes that of the Federation of Small Businesses, who found 62% of SMEs have been subject to late or frozen payments.”
Q: Have you seen an increase in late payments due to the COVID-19 pandemic?
The issue of late payments is not new – our research tells us since 2016 the problem has been getting progressively worse. In Q4 2019, 47% of respondents answered ‘yes’ to the question ‘are late payments a problem for your business?’; in 2016 this figure was 28%.
Of the 348 respondents who said they were due outstanding money, nearly a third said they are owed over £40k, while 35% are owed between £21k and £40; a further 29% have unpaid invoices of up to £20k.
“The impacts on businesses is indisputable,” said Neil. “Small business owners are stretched enough without having to chase invoices and it stymies everything from innovation to causing investment decisions to be delayed.”
Q: What impact do late payments have on your business?