UK Small Businesses Owed £67bn Due to Late Payments
8% rise in the number of unpaid invoices in 2015 with companies waiting an average of 72 days to get paid
Britain’s small and medium businesses are owed a staggering £67.4bn in unpaid invoices, up by 8% from 2014’s £62.5bn figure and 34% from 2011’s £49.5bn, according to research by the Asset Based Finance Association (ABFA).
Additional research from the group revealed that businesses’ wait times had also increased, with small and medium firms reporting an average wait time of 72 days – 11 days longer than in 2009 at the peak of the recession.
According to the ABFA’s study, which featured 180,000 businesses, companies in the manufacturing and construction industries are the most affected by late paying customers with an estimated £13.4bn and £7bn owed to businesses in each corresponding sector.
The report noted that while late payment problems continue to cause issues for small firms, more companies are using asset-based funding in order to deal with cashflow issues.
Jeff Longhurst, chief executive of the ABFA, commented:
“The scale of unpaid invoices to Britain’s small and medium businesses has become enormous, but there is no reason for it to become a barrier to investment and growth.
“Businesses need to recognise that their unpaid invoices are an asset. In many cases, they are the most valuable asset a small and medium enterprise has, and they can be the key to unlocking critical and affordable funding.”