This represents a £9.4 billion increase on last year, and is particularly startling when compared with the comparatively small debt burden of larger firms, at just £6.7 billion.
In fact, the average small firm is now owed £38,186 in late payments, with a third of businesses suggesting this delay costs their business approximately £500 per month. This interruption of the day-to-day cash flow of small businesses not only threatens their own solvency, but also has repercussions along the supply chain, with owed businesses often unable to pay their own suppliers.
“These latest figures are a further reminder of the major headache caused by late payments. Not paying on time and lengthy terms can have a seriously detrimental impact on small firms,” confirmed Federation of Small Businesses national policy chairman Mike Cherry, commenting on the situation in the Financial Times.
While some progress is being made to shine a light on the severity of this issue, with the FSB campaigning heavily for greater regulation surrounding late payments, it is likely to be some time before any new legislation comes into force.
In the meantime, Aldermore has turned to members of the small business community on Twitter to gather advice on what SMEs can do to minimise the risks of late payments for their business.
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